As of today, a new plan is available for users in the UK, with an option for a Basic (With Ads) service at £4.99 a month – or €5.99 a month in Ireland when a new plan is available.
Enjoy your Netflix experience exactly as it is today? Great! Nothing about the way you watch Netflix is going to change.
As of today, Basic with ads, Netflix’s new lower priced ad-supported plan is available starting at $6.99/month. Visit https://t.co/7DdHumcHkz for details.
— Netflix (@netflix) November 3, 2022
In contrast to other streaming services where users are able to interrupt ads by clicking the Skip Ads link at the lower right after five seconds, such as YouTube, Netflix’s new plan with ads will not allow users to skip the ad videos on their screen.
According to Netflix media plan sent out to advertising agencies indicates that the ads will start out being 15 or 30 seconds long and will play before and during shows and films, with a brand frequency maximum of three times per day and once per hour.
The news may not be as good for users, but for companies, it represents a great opportunity to run their advertisements to a huge audience without interruptions, which justifies the cost per thousand impressions, also know as CPM.
In the US, Netflix markets its ads at a CPM (cost per thousand impressions) of around US$65, which is way more expensive compared to social media and Youtube. It has also been reported that Netflix is asking for year-long commitments from advertising agencies ranging from $10 million to $20 million, depending on the size of the agency.
While large brands will prefer to pay the highest price for the space and test the service rather than run the risk of being left out and seeing competitors benefit from it. Small businesses may be unable to afford the costs of advertising on Netflix in this first rollout of the new media plan.
However, I can assume that in the near future, the cost of advertising on Netflix may become lower than it is today if more streaming services choose to invest in this business model.
