Some Netflix advertisers asked for refunds, while others moved the investment to 2023.
Netflix is refunding some of the money to advertisers for failing to deliver promised audiences in the basic plan’s advertising contracts with ads, in some cases reaching roughly 80 percent of the expected audience.
The streaming platform launched the basic plan with ads in Spain on November 10, which reduces the price of entry to the platform to 5.49 euros per month (2.5 euros less than the basic plan). In exchange, it includes advertising, decreases playback quality, and removes some of the most viewed titles from the catalog. The basic plan with ads is available in some select markets.
This new subscription plan is not reaching the number of views per ad that had been agreed with the advertising companies, remaining around 80 percent of the estimate.
A slow debut in the growth of users that has forced him to return the money for the ads not shown, according to the statements of five agency executives collected by the American magazine Digiday .
However, not all advertisers have asked Netflix to get their money back. Those who have it back have been companies that were carrying out marketing campaigns specifically scheduled for these dates and have wanted to reallocate this expense. However, other companies have decided to move that investment to the first months of 2023, trusting that the audience will continue to grow until the guarantees agreed by then are met.
Did Netflix charge a lot for advertising?
Netflix ‘s ad deal system is based on an on-demand pay-as-you-go where advertisers pay for the estimated amount of reach for their ads and, if that amount is not reached, Netflix would release the unspent ad dollars at the end of the advertising deal. trimester.
In addition, Netflix is the most expensive platform in this sector to invest in ads. It initially charged $65 for every thousand ad views, while Disney+ , which also launched its ad-supported subscription plan on Nov. 7, is priced at $50. Now, even though Netflix has lowered the price to $55, it’s still more expensive than its rival.
Returning to advertisers leaves Netflix in a bad spot. However, agency executives say it may be a “symptom of how quickly the company launched that business,” rather than a sign of Netflix ‘s long-term prospects .
Likewise, the platform continues to seek advertising agreements for 2023, as detailed by the executives, who also do not rule out that, in order to achieve them, Netflix will have to further reduce the price per advertisement.