Why Netflix's Ad-Supported Tier May Be Great For Brands and Consumers

Some in the media are saying that Netflix's plans to launch a new ad-supported tier for customers is a predictable money grab. Yet Netflix co-CEO Ted Sarandos describes the tier as a response to a segment of customers who feel Netflix is currently too expensive, and would willingly watch commercials in exchange for a much lower price. I do believe those customers exist and they may be more common than most people in the industry appreciate. The reason I think this could be a good thing is because of the unique opportunities that this could offer for consumers and for brands alike to experience a new type of relevance in advertising.

Most ads today are targeted based on relatively useless demographic breakdowns like “men aged 25 to 44” or on guesstimated interests based on type of content. Netflix, with their vast data store of what someone actually likes, could offer a much more useful advertising option with much better targeting capability. Imagine upcoming movies that could advertise within similar older movies. Or products that are featured in a particular film, like a BMW in a James Bond film, being able to advertise their latest model specifically inside that movie.

If I were still working in advertising, this announcement would be making me very excited about the possibilities.