Here's how we're measuring Netflix advertising campaigns (1x01)

• Starting today, November 10th, - in certain countries- users who have opted to subscribe to the new ad-supported Netflix service will start to see commercials on the platform.

As always, when there is a major new development in the industry, there is quite a lot of buzz and all manner of opinions. At FLUZO, in just a few days, we'll start producing data measuring the impact of advertising on this platform and we’re looking forward to clearing up doubts like these:

• What reach, frequency or incremental reach does Netflix bring to an advertising campaign as compared to other media? Will it offer more or less reach than digital powerhouses like YouTube? What will its incremental reach be on top of that of media like television? What frequency? How will these metrics relate to the binge watching that is so typical on this platform?

• What targets do we reach via this medium? OTT will offer possibilities to segment advertising by content type and demographics (as of 2023). How will this targeting work? Will we locate those coveted low TV viewers here?

• How will the audience respond? One of the most promising things about including ads on Netflix is its potential as an advertising medium. This is due to the great user experience the platform offers and the high degree of audience engagement at the moment of impact, among other reasons. In other words, will we be more open to watching ads on Netflix than on other media? Will we see better KPIs, such as brand rating or ad recall? We'll shed light on all this by surveying those impacted through OTT and comparing them to those exposed to the same campaign in other media.

We talked about all this with Natalia Quintas-Froufe, PhD from the University of Vigo and professor of Audiences at the University of La Coruña. For her, the biggest advantage as an advertising medium that Netflix offers at the moment is that it is "a virgin advertising platform". "The viewer/user has never seen ads on it so they are not familiar or used to these new advertising codes. Early advertisers will clearly benefit from it," he notes.

Little by little, we have been gathering a lot of details about the model: a maximum of 4 to 5 advertising minutes per hour will be made available; each ad is to last 15 to 20 seconds; it appears that the model will be more similar to traditional television than to programmatic TV, restricted -at least in this pilot phase- to a single advertiser per category, who must commit to a minimum annual investment.

The movement of this OTT and, in general, the expansion of the AVOD model - let's remember that, in just a few months, Disney will begin to offer its own model with ads - represents a new milestone in the fragmentation of advertising media. "It is a clear consequence of the (hyper)segmentation of audiences that we have been experiencing for years now" says Natalia. "In theory, this fragmentation allows for the creation of more targeted and segmented advertising, which customers tend to embrace because they are typically tied to their interests. But it is also true that audiences receive thousands of advertising impacts every day, which makes them 'immune' to many of them because of the current advertising saturation of the channels".

To manage -and take advantage of- this context, it is increasingly urgent for advertisers to have data that provides a complete general context of what is happening with their campaigns beyond the data reported by Netflix itself.
In effect, the expansion of the AVOD model - remember Disney will start offering its own ad- based model in just a few months - represents a new milestone in advertising media fragmentation for an audience that is finite and should be impacted efficiently, while avoiding excessive frequencies or overlooking segments.

We will keep you informed.