Twelve months ago, Netflix's entry into the ad market might have seemed underwhelming. The 'Basic with Ads' tier was just that - basic. It offered great content but had unknown subscribers, lacked a significant marketing push, and featured high CPMs with limited targeting capabilities. However, Netflix's Q3 results told a more positive story, showing a growth in overall subscriptions from 5.49 million to 8.76 million (now a total of 247.15 million), with Europe experiencing the strongest surge at 1.75 million new additions.

A recent update from Netflix's sales team, to Ebiquity, positively demonstrated growth in capabilities with greater targeting and audience insights. Furthermore, a reduction in base-level CPMs was noted - no doubt welcomed by advertisers.

As a firm believer that user experience in TV environments is critical for advertisers in deciding where to allocate media investments, it's encouraging to see Netflix prioritizing user experience. This commitment is evident in their strict frequency caps, lighter ad loads, and sensitive handling of brand-related issues like children's advertising, gaming, and high fat, sugar, and salt (HFSS) products. Netflix positions itself as a television entity, and rightly so.

While it offers an excellent environment for advertisers, scale remains a challenge. The ad tier currently has over 840k+monthly active users in the UK (15 million globally), with the goal to reach 1 million by year-end. Content is king within the streaming wars and with global content spend increasing to $17 billion in 2024, it is likely that we will continue to see growth across both the ad-tier and premium subscriptions.

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Netflix reports 15 million monthly users for its ad-supported tier, launched to boost growth and revenue. Price hikes on ad-free plans aim to shift subscribers to this tier.

The streaming giant saw a substantial rise in subscriptions, surpassing forecasts after a price increase in key markets. This followed initial resistance to advertising.

Amidst competition from Disney+ and others with ad models, Netflix's ad-tier continues to grow, attracting 30% of new signups in available countries. Amazon's Prime Video plans a similar ad-inclusive model next year.