Netflix stumbles out of the starting gate with ad-supported offering
Netflix turned on the ad faucet fast. They were asking for sky-high CPM’s in exchange for underwhelming targeting and measuring.
Still like the shiny gold object, the attraction to a new large audience, uncluttered environment, and opportunity to recoup lost reach was enough for many large advertisers to sign on quickly. Be careful what you wish for. Netflix is now giving money back.
There's nothing wrong with getting money back, in fact, it's a good thing. Netflix like most #Streaming #CTV #OTT is sold on a pay-per-delivery basis. This means advertisers only pay for impressions that were delivered to an audience. Traditional TV and cable keep money from under delivery and offer make goods. Make goods are almost never as good as the original programs and time periods purchased.
The problem is advertisers would have not committed money to the current quarter if they did not want to spend it. Lost ad budget spending is the same thing as a missed opportunity.
I don't know how many ad impressions Netflix sold but I did think that they will stumble almost immediately. These days most companies and sales teams overpromise and underdeliver. You can only get away with those tactics a few times. Netflix still believes they are in the driver's seat and they may be.
I think there are 3 core reasons why Netflix missed its Ad Impression goals. Click here for the full article.