Microsoft and Netflix Ads
In this article, we’ll be reviewing the recent announcement that Netflix has chosen Microsoft as its technology and sales partner to aid in its first ad-supported subscription offering. This deal means has massive implications all ads served on the most popular streaming service in the world will be exclusively available through the Microsoft platform.
That’s a pretty big deal!
It’s an especially big deal for your Shopify store as you should be able to benefit from additional ad placement options on Netflix.
In today’s blog, we’ll look at what this announcement means for your business and how you can avail of this new opportunity between Microsoft and Netflix.
Grab your popcorn! 🍿
Join the Optily newsletter!
Stay up-to-date on platform changes, digital marketing tactics, and industry news. We promise we won’t spam!
What is the Microsoft and Netflix Ads Announcement?
After months of speculation, Netflix announced that it chose Microsoft as its technology and sales partner for its upcoming ad-supported subscription tier.
Although Netflix had been historically resistant to advertising, it doesn’t come as much of a surprise that the streaming service is introducing ads to its platform. Netflix has been in the media a lot recently following its downturn in stock price caused by its subscription revenue shrinking. So news of a new lower-cost streaming tier makes sense.
“41% of Netflix watchers do not pay for the service.” – Kevin Stagg, Chief Marketing & Customer Officer at Optily. Because of this up to 2 million subscribers are likely to leave in the coming quarter.
Initially, Netflix CEO Reed Hastings said “an ad-supported tier could take years to implement.” However, the company has quickly pivoted to a much more aggressive 2022 Q4 launch target after criticism from advertisers and competitors grew.
It’s now moving into November of 2022, so we’ll hopefully soon know more about the launch of this new service, however, only time will tell.
What Microsoft and Netflix Ads means for eCommerce Advertising?
As an eCommerce advertiser should you be focusing all your energy on Microsoft and Netflix ads? No.
In February we spoke about how TikTok Expands Its Partnership with Shopify. We still believe that this is still a much more impactful partnership for Shopify stores. However, this new advertising opportunity with Netflix should be kept in mind for your 2023 advertising strategy.
It seems likely that bigger brands will saturate this market at least at its launch. So as a smaller eCommerce brand we suggest you analyze the trends and how you can best optimize your ads when the market opens up, especially for product-based eCommerce companies.
Key Takeaway for Advertisers
As an advertiser, what does this new opportunity mean for you?
➡️ You should immediately jump on this new advertising opportunity when it becomes available to explore its potential!
➡️ Privacy is a core component of the new partnership, so be aware that targeting may not be too accurate in its early stages.
➡️Experts are currently unsure where these ads will sit in terms of pricing structure.
➡️ 23% of current Netflix subscribers said they do not want ads, so be smart with your ads and be aware of potential initial backlash as this new initiative is rolled out.
Conclusion
Microsoft and Netflix ads are a very new concept and it’ll take a while for the initiative to mature. However, it is something that we think all advertisers and marketers should be aware of for the coming year.
As always we’ll keep you updated with any key insights as this exciting new opportunity develops.
In the meantime, if you are interested in seeing what Optily can do for your business, download our free app today! Optily is a revolution in digital ad spend management. We can supercharge your eCommerce advertising across the online advertising world.
Thanks for reading and go enjoy some ad-free Netflix!🍿🥤
