Netflix Wants to Make Ads More Like TV Shows

Netflix Wants to Make Ads More Like TV Shows

Even for those who grew up in the days of cable — the ones who cut their teeth on brain-melting Sunny D or Kool Aid commercials — watching ads on streaming services is somehow more taxing and annoying than anything that came before Netflix first burst onto the scene. Part of the issue is that the same ads run constantly on streaming services, sometimes repeating during the same ad break, ad nauseam. Now Netflix could be working to revise its systems that would make watching ad breaks just a bit less repetitive, and perhaps slightly more bearable.

Advertising execs have reportedly mentioned Netflix is looking to innovate on kinds of “episodic” ad campaigns. According to a report by the Financial Times citing unnamed advertising leaders, Netflix’s “Basic with Ads” subscription tier would instead show consumers a series of interrelated ads while binging a movie or series. This would mean some of those targeted ads wouldn’t repeat again and again during an ad break, though you would likely get ads for similar products over multiple breaks.

The comments came out of the Cannes Lions festival in France where Netflix was reportedly courting ad executives. Netflix first introduced its plans for advertising early last year with executives like former co-CEO Reed Hastings having to walk back previous claims extolling the “simplicity of subscription.” Netflix has been using Microsoft technology for the advertising side of its business, but the company will reportedly branch out and try to “innovate” with its own ad servers. The streaming service was trying to emphasise that a tech company can hit users with more targeted advertising.

Netflix declined to comment on its advertising plans, instead pointing to its recent Upfront conferences.

Basic with Ads viewers already suffer through four-to-five minutes of commercials per hour of viewing. These ad breaks run at the beginning and during content, and an hour-long show might have one break at the start and three more during an episode. That’s not nearly as bad as some other services like Paramount+. The “Essential” tier costs $US4.99 but users need to sit through an ad at the start of an episode, then upwards of five commercial breaks, each of which can last several minutes.

Hulu has long been notorious for its repetitive ad breaks, to the point where some users find the content utterly unwatchable. In a survey released last year by streaming software company Whip Media, 41% of respondents were at least somewhat annoyed by Hulu’s ads. Another 26% were very annoyed. More than 70% of those Hulu users said they saw the same ad over and over again. Advertisers have also complained about this trend for years. They’ve also shown concern that ad oversaturation makes consumers less likely to buy their products.

Ads keep repeating on streaming services for a number of reasons, though the biggest problem is due to the nature of targeted ads. Advertisers may be running ads on multiple platforms, so you’re more likely to see the same ad because it’s coming from the service, the network, or the platform — so long as you’re in the advertiser’s requisite demographic. Some advertisers have tried to put caps on the number of times a single user can see an ad, but nothing has specifically fixed the issue even as it’s bad for both companies and consumers.

Netflix has already tested ending its regular “Basic” subscription in Canada to better emphasise both the more expensive “Standard” tier as well as its cheaper ad tier. Though the company has not stated any plans to end Basic elsewhere, the company could be trying to entice advertisers by growing subscriber numbers on its service. Netflix’s ad-based tier is already one of the best among the growing host of streaming services now more dependent on advertising, and it finally supports 1080p.

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