The last two weeks have seen Netflix get kicked off the Hulu program altogether. Last week, they got pulled and Netflix couldn’t get a movie to air any more, which caused them to cancel the show altogethera situation they managed to prevent using the streaming services. So now they face a series of ads: the ones that use a line number for a few minutes to show up on ads, then go live, then run as a Netflix ad again. It seems like they have managed to move from their current position of being free but mostly paid, to a full-blown video streaming service where only you need to spend a few minutes watching ads to get the series done. The ads have already played into Hulu’s hands: after last week’s cancelation, a spokesman for Netflix did say that the price was set at $15 per second. For those of you not in the know, the idea behind the ad industry is that it aims to create a “realistic” experience that allows users to share all those movies they have, and not have to watch ads. And that’s great, but why keep buying ads? Here’s where things get complicated. In order to make Netflix a successful brand, you need to be willing to put in great effort to keep your ad business up and going. As you can hear from Netflix, as soon as it gets the ads they’re selling, Netflix says they’re still working on getting those ads up and running. However, they’re not exactly a company that spends on advertising every month.
The ads have also caught fire in other ways. Some of them are free, as The Huffington Post notes:
There are three primary advertising methods used for these ads: online, mobile, and realtime ads. The first is ‘advertising time,’ when you view the ads for a few seconds, and you see if one of those ads is relevant… The bottom of the banner in the ad looks like an ad, but in actual fact, it’s being advertised in real time. Some of these ads are actually good, and some are awful. Most ads for the “real time” category are a mess, but they give you a very real way to browse the web and share photos and videos.
The second type of advertising, and the one most widely seen, was in 2004 when ad company AOL pulled out of advertising it ran, as this New York Times piece demonstrates. Many people were pretty shocked when AOL apologized. When you look at what happened next, the problem is that they’re not actually apologizing. Ad agency Viacom has admitted it’s doing a “brazen attempt” to make ad revenue available to video ads, so it’s not really their intention to make the advertising available on Amazon, but rather Microsoft. I’d give Google more credit for looking into this though.
The third and possibly most interesting way that Netflix was able to monetize a TV ad is through a third party that uses third-party revenue. The idea behind “video tracking” is “video ad revenue” but it comes with two caveats. First, it’s a bit harder to figure out that someone might be tracking your ad, but video advertising is so much more than just revenue, at least according to the research of CTO Mark Corallo. And second, while video data is a critical factor of any business, many things can be tracked. For example, you can often see new traffic to your page at a very fast clip, so if you only include a few seconds of action, it’s likely that you’re just the first person to get your message across. You certainly can be very sneaky and see how many ads you’re trying to get across, but to be able to find your target audiences who wouldn’t have otherwise seen them would be hard. You shouldn’t have to rely on any company that can get your ad up and running, but this could be all a lot less profitable if they weren’t able to make new subscribers. Also, if that’s the way you’re doing things with video advertising in real time, you need to be smart enough to track the exact people who show up to your ad. If you’re using this for a third party for purposes other than monetization, that could affect your brand image. That’s why your TV ads have to be clearly labeled as “video tracking” and to be in your ad for as long as possible.
So what happens now when you run out of advertising on Netflix? Maybe Netflix will find a way to get out of advertising entirely, or they will shut down for good.
As a marketing service, it’s important to understand that it’s about itself. that it’s about it’s a service, to be about it’s about it’s about it’s about it’s you. And to offer it’s that’s about it what it’s