The following article was originally featured on IndieWire by Chris Lindahl published on August 2, 2022.
Last week Meta reported its first-ever revenue slide, Alphabet revealed YouTube’s growth has slowed to a snail’s pace, and Roku lost about one-quarter of its shareholder value. All the corporations pointed to a declining advertising market as brands scale back spending in the face of inflation, interest rate hikes, and fears of an upcoming recession. If Netflix and Disney were looking to get into the ad business — and they are — it looks like this would not be the time to do it.
“We seem to have entered an economic downturn that will have a broad impact on the digital advertising business,” Meta CEO Mark Zuckerberg said during the company’s Q2 earnings call Wednesday.
Disney and Netflix are betting big on introducing ads to their flagship services. They’ve got an edge with broad reach and premium content, but in a soft market they need to give advertisers something better than what they have now — namely, returns on investment and the ability to precisely target users. Programmatic advertising exec Curt Larson said that’s exactly what the streamers could offer.
“[Connected TV] is a supply-constrained market,” said Larson, who serves as chief product officer at Sharethrough. “There are more advertisers that want to buy ads on CTV than there is quality supply. While there may be a softening in the ads market, I don’t think that’s a dramatic impact for someone like Netflix — Netflix is going to be such a premium, desirable spot for advertisers to run their ads, assuming they come up with a decent ads product.”
A July report from MoffettNathanson found Netflix could generate $1.2 billion in U.S. advertising revenue by 2025, with the future potential to generate the highest average revenue per user. Wells Fargo estimated that global figure could exceed $7 billion in 2025 and account for 15 percent of Netflix total revenue.
Netflix’s plan to introduce a cheaper, ad-supported tier in early 2023 comes with the understanding that it needs to be great. It partnered with Microsoft, which is using the Netflix partnership to expand their existing services in the ad space into video.
“When you look at the scale that we are offering, the technical DNA, the partners that we’ve got lined up, I’m pretty optimistic that over a couple of years, we can deliver an experience which is fundamentally different from the ad experience on linear,” Netflix COO Greg Peters said during Netflix’s Q2 earnings video on July 19.
Netflix could set itself apart in the ad marketplace is with more precise targeting (all that user data) and better measurement for higher ROI. Increasingly, streaming services rely on things like QR codes and prompting users to click and send themselves an email to directly tie the ad to their behavior (like buying the product).
“Imagine you see an ad and it says ‘click OK to shop this product, or learn more,’ you click OK on your remote and you get a push notification to your phone right through the Netflix app,” Larson said. “If they can create an experience that allows consumers to action on the ad and measure whether the action actually happened, that’s kind of one of the holy grails on CTV right now, but it’s not very widely available.”
The chance to become the advertisers’ sacred treasure is an opportunity that streamers need. Netflix lost over 1 million net subscribers this year and Comcast reported on its July 28 earnings call that Peacock added no paid subscribers and lost 1 million monthly active accounts compared to Q1. Overall, NBCUniversal’s ad revenue dropped 1 percent last quarter compared to the same period last year.
This May marked the first year that YouTube participated in the Upfronts week in New York, pitching their woo to advertisers alongside legacy media companies like Disney and NBCUniversal. On YouTube’s blog, its director of global advertiser marketing crowed that “the digital and linear TV worlds are converging.” Another way to look at it: Traditional networks, social-media companies, and streamers now fight for the same limited pool of user and advertiser attention.
The following article was originally featured on IndieWire by Chris Lindahl published on August 2, 2022.
Last week Meta reported its first-ever revenue slide, Alphabet revealed YouTube’s growth has slowed to a snail’s pace, and Roku lost about one-quarter of its shareholder value. All the corporations pointed to a declining advertising market as brands scale back spending in the face of inflation, interest rate hikes, and fears of an upcoming recession. If Netflix and Disney were looking to get into the ad business — and they are — it looks like this would not be the time to do it.
“We seem to have entered an economic downturn that will have a broad impact on the digital advertising business,” Meta CEO Mark Zuckerberg said during the company’s Q2 earnings call Wednesday.
Disney and Netflix are betting big on introducing ads to their flagship services. They’ve got an edge with broad reach and premium content, but in a soft market they need to give advertisers something better than what they have now — namely, returns on investment and the ability to precisely target users. Programmatic advertising exec Curt Larson said that’s exactly what the streamers could offer.
“[Connected TV] is a supply-constrained market,” said Larson, who serves as chief product officer at Sharethrough. “There are more advertisers that want to buy ads on CTV than there is quality supply. While there may be a softening in the ads market, I don’t think that’s a dramatic impact for someone like Netflix — Netflix is going to be such a premium, desirable spot for advertisers to run their ads, assuming they come up with a decent ads product.”
A July report from MoffettNathanson found Netflix could generate $1.2 billion in U.S. advertising revenue by 2025, with the future potential to generate the highest average revenue per user. Wells Fargo estimated that global figure could exceed $7 billion in 2025 and account for 15 percent of Netflix total revenue.
Netflix’s plan to introduce a cheaper, ad-supported tier in early 2023 comes with the understanding that it needs to be great. It partnered with Microsoft, which is using the Netflix partnership to expand their existing services in the ad space into video.
“When you look at the scale that we are offering, the technical DNA, the partners that we’ve got lined up, I’m pretty optimistic that over a couple of years, we can deliver an experience which is fundamentally different from the ad experience on linear,” Netflix COO Greg Peters said during Netflix’s Q2 earnings video on July 19.
Netflix could set itself apart in the ad marketplace is with more precise targeting (all that user data) and better measurement for higher ROI. Increasingly, streaming services rely on things like QR codes and prompting users to click and send themselves an email to directly tie the ad to their behavior (like buying the product).
“Imagine you see an ad and it says ‘click OK to shop this product, or learn more,’ you click OK on your remote and you get a push notification to your phone right through the Netflix app,” Larson said. “If they can create an experience that allows consumers to action on the ad and measure whether the action actually happened, that’s kind of one of the holy grails on CTV right now, but it’s not very widely available.”
The chance to become the advertisers’ sacred treasure is an opportunity that streamers need. Netflix lost over 1 million net subscribers this year and Comcast reported on its July 28 earnings call that Peacock added no paid subscribers and lost 1 million monthly active accounts compared to Q1. Overall, NBCUniversal’s ad revenue dropped 1 percent last quarter compared to the same period last year.
This May marked the first year that YouTube participated in the Upfronts week in New York, pitching their woo to advertisers alongside legacy media companies like Disney and NBCUniversal. On YouTube’s blog, its director of global advertiser marketing crowed that “the digital and linear TV worlds are converging.” Another way to look at it: Traditional networks, social-media companies, and streamers now fight for the same limited pool of user and advertiser attention.
Behind Headlines: 180 Seconds in Ad Tech is a short 3-minute podcast exploring the news in the digital advertising industry. Ad tech is a fast-growing industry with many updates happening daily. As it can be hard for most to keep up with the latest news, the Sharethrough team wanted to create an audio series compiling notable mentions each week.
The following article was originally featured on IndieWire by Chris Lindahl published on August 2, 2022.
Last week Meta reported its first-ever revenue slide, Alphabet revealed YouTube’s growth has slowed to a snail’s pace, and Roku lost about one-quarter of its shareholder value. All the corporations pointed to a declining advertising market as brands scale back spending in the face of inflation, interest rate hikes, and fears of an upcoming recession. If Netflix and Disney were looking to get into the ad business — and they are — it looks like this would not be the time to do it.
“We seem to have entered an economic downturn that will have a broad impact on the digital advertising business,” Meta CEO Mark Zuckerberg said during the company’s Q2 earnings call Wednesday.
Disney and Netflix are betting big on introducing ads to their flagship services. They’ve got an edge with broad reach and premium content, but in a soft market they need to give advertisers something better than what they have now — namely, returns on investment and the ability to precisely target users. Programmatic advertising exec Curt Larson said that’s exactly what the streamers could offer.
“[Connected TV] is a supply-constrained market,” said Larson, who serves as chief product officer at Sharethrough. “There are more advertisers that want to buy ads on CTV than there is quality supply. While there may be a softening in the ads market, I don’t think that’s a dramatic impact for someone like Netflix — Netflix is going to be such a premium, desirable spot for advertisers to run their ads, assuming they come up with a decent ads product.”
A July report from MoffettNathanson found Netflix could generate $1.2 billion in U.S. advertising revenue by 2025, with the future potential to generate the highest average revenue per user. Wells Fargo estimated that global figure could exceed $7 billion in 2025 and account for 15 percent of Netflix total revenue.
Netflix’s plan to introduce a cheaper, ad-supported tier in early 2023 comes with the understanding that it needs to be great. It partnered with Microsoft, which is using the Netflix partnership to expand their existing services in the ad space into video.
“When you look at the scale that we are offering, the technical DNA, the partners that we’ve got lined up, I’m pretty optimistic that over a couple of years, we can deliver an experience which is fundamentally different from the ad experience on linear,” Netflix COO Greg Peters said during Netflix’s Q2 earnings video on July 19.
Netflix could set itself apart in the ad marketplace is with more precise targeting (all that user data) and better measurement for higher ROI. Increasingly, streaming services rely on things like QR codes and prompting users to click and send themselves an email to directly tie the ad to their behavior (like buying the product).
“Imagine you see an ad and it says ‘click OK to shop this product, or learn more,’ you click OK on your remote and you get a push notification to your phone right through the Netflix app,” Larson said. “If they can create an experience that allows consumers to action on the ad and measure whether the action actually happened, that’s kind of one of the holy grails on CTV right now, but it’s not very widely available.”
The chance to become the advertisers’ sacred treasure is an opportunity that streamers need. Netflix lost over 1 million net subscribers this year and Comcast reported on its July 28 earnings call that Peacock added no paid subscribers and lost 1 million monthly active accounts compared to Q1. Overall, NBCUniversal’s ad revenue dropped 1 percent last quarter compared to the same period last year.
This May marked the first year that YouTube participated in the Upfronts week in New York, pitching their woo to advertisers alongside legacy media companies like Disney and NBCUniversal. On YouTube’s blog, its director of global advertiser marketing crowed that “the digital and linear TV worlds are converging.” Another way to look at it: Traditional networks, social-media companies, and streamers now fight for the same limited pool of user and advertiser attention.
Founded in 2015, Calibrate is a yearly conference for new engineering managers hosted by seasoned engineering managers. The experience level of the speakers ranges from newcomers all the way through senior engineering leaders with over twenty years of experience in the field. Each speaker is greatly concerned about the craft of engineering management. Organized and hosted by Sharethrough, it was conducted yearly in September, from 2015-2019 in San Francisco, California.
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