Dave Morgan's Crystal Ball: How Netflix's Ad Tier Will Shape the Video Ad Landscape In conversation with Dave Morgan, CEO of Simulmedia, on the impact of Netflix's ad-supported tier and
the future of the video ad industry.
As Netflix dives into the realm of ad-supported streaming, it's clear that the video advertising landscape is about to experience a seismic shift. With the streaming giant making its move, we sat down with Dave Morgan, CEO of Simulmedia, to discuss how Netflix's new tier will impact the industry and what it means for advertisers, long-form video content, and the advertising world at large. In light of the tough ad economy in 2023, Morgan believes that Netflix's ad-supported tier is well-positioned to succeed. "It still has limited inventory as the ad tier just begins to scale. Thus, it doesn't need huge commitments from advertisers, just modest
commitments from a number of the top brand advertisers, and it doesn't need to trade piercing for volume like fully scaled players need to when budgets are under pressure," he says. Morgan also thinks that an ad-supported Netflix reinforces the power of long-form video content as an advertising media, but doesn't
undermine the short-form success of platforms like TikTok and YouTube. "Its success is not mutually exclusive to Netflix's success," he says. When asked about the impact of Netflix on industry standards, go-to-market strategies, and thought leadership in the video ad industry, Morgan has high expectations. "A lot,"
he says, adding that Netflix's leaders "(Jeremi Gorman and Peter Naylor) are super smart, well respected and have done this before. We need leadership around native streaming capabilities in the ad community, and I am sure that they will step up and take the mantle." Morgan also has strong opinions on how the
advertising industry can inspire and ennoble the commercial world and contribute to the regeneration and redemption of mankind. "We need to make access to high-speed broadband affordable and ubiquitous for everyone... We need to rebuild community-centric local news and information platforms with the demise of
the local print media and the shrinking of local TV news. We need news content that can be anchored in news, not just opinion. That will have to be ad-supported because if news requires subscriptions and broadband fees, those who need it most won't be able to afford it." As for other players in the industry, Morgan suggests that now is the time for major streaming and linear TV players to go for "leap-frogs" and find ways to improve their ad experiences. He highlights the importance of embracing new creative formats, enabling targeting without leaking user data, and solving annoying issues like ad frequency
capping. Morgan is also critical of the current state of programmatic ad-tech, especially in the face of the growing popularity of Connected TV (CTV) ads. "We need to dump the banner-born programmatic approaches for more natively-focused CTV platforms and approaches," he says, adding that the margins taken by
programmatic platforms are "outrageous" and the lack of transparency is "dragging our industry down." In terms of creative strategies for advertisers during the ad recession, Morgan sees this as a great time to focus on user experience and reduce the frequency of irrelevant ads. However, he admits that he's "not
hopeful that it will happen this year." Discussing the potential for the advertising industry to leverage the power of advertising to inspire and ennoble the commercial world, Morgan calls for more people in the industry to speak out about the parts of the business that need fixing. He believes that the industry can do better by turning back the clock to the days when advertising helped people live healthier lives, find products they needed, and created scale in consumer goods sales that made them affordable to the masses. "We need to turn back the clock to the days when advertising helped people live
healthier lives, find products that they needed and didn't know existed, and created scale in consumer goods sales that made them affordable to the masses. We can do so much better than we are today." Dave Morgan's insights provide a thoughtful analysis of the impact of Netflix's ad-supported tier on the video ad
market and the industry as a whole. As the industry navigates challenging times, his suggestions for improvement and evolution are worth considering. By focusing on user experience, embracing innovation, and prioritizing transparency and ethics, the advertising industry can continue to thrive and contribute to
the betterment of society. |
All the news you need today, in a format that isn't TL:DR, summarized for the busy executive.
Meta, the parent company of Instagram, has launched new upgrades to Instagram Reels, including a "Trending" feature that shows users the top songs and hashtags on the platform, an editing screen that allows video, audio, text, and sticker editing, and new metrics that provide total and average watch time.
Instagram remains the most downloaded social media app in the US with 50 million downloads in March, while TikTok had 47 million downloads. However, Montana has approved a bill that could make it illegal to download TikTok and fine any platform that makes it available up to $10,000 a day, with the earliest effective date being January 2024. The new upgrades to Instagram Reels and its continued popularity may offer a backup option for social media marketing if TikTok bans become more
widespread Twitter is spreading its wings with the introduction of 10,000-character tweets for Blue subscribers, as well as a rebrand of its Super Follows feature to Subscriptions. Users can offer three monthly subscription tiers at $2.99, $4.99, and $9.99, and Elon Musk has confirmed that subscribers can monetize their content without
Twitter collecting any fees for the next 12 months. The changes come as Twitter faces competition from newsletter platform Substack, which recently introduced a Twitter-like feed. While the changes at Twitter may be more hectic than a downy pillow fight, marketers are getting more tools for monetizing their audiences on the platform. News
publishers are struggling in the programmatic advertising space due to increased brand safety and brand suitability filters from verification firms like IAS and DoubleVerify. These filters are making it challenging for advertisers' campaigns to scale and are being applied to direct-sold campaigns. News publishers are being forced to figure out how to adjust inconsistencies, redundancies, and outdated filters on nearly every deal. However, media buyers are cutting bait too quickly when
working with news publishers instead of trying to remedy the issue. To solve this problem, news publishers can use marketing strategies like education, targeted advertising, video presentations, and trade shows to make unsought products more sought-after. Magnite, the independent supply-side platform, has launched ClearLine, an offering that
provides media buyers with access to "premium video inventory" without the need for a demand-side platform (DSP). However, the company says DSPs are still its primary trading partners. ClearLine lets media buyers share data with publishers more securely to find their desired audiences. Magnite said ClearLine represented a necessary evolution of the ad tech sector that "significantly increases spend going towards working media". The move is seen as a response to direct demand from media
agencies for a more direct means of sourcing inventory in certain scenarios and offers participating publishers more flexibility. According to a new survey by Dentsu, nearly a third of Japanese respondents are aware of the concept of Web3, with awareness surging to almost half among younger consumers aged 15-19. Web3, a term used to
describe a range of blockchain-enabled digital media platforms and applications, has garnered significant attention among Japanese consumers, who expect it to improve information security, prevent unilateral changes to related rules, and facilitate cross-platform use of tools. However, the report notes that the lack of public understanding, information security risks, and slow progress in updating relevant laws are common concerns among respondents, as well as industry insiders. The Trade Desk's drive to consolidate its buying power into fewer paths to programmatic inventory through the "GPID" initiative and OpenPath has led to some ad tech executives criticising the firm for its lack of clarity and impartiality. While others have defended The Trade Desk, saying its efforts are necessary for the programmatic
industry, fears of a potential conflict of interest that may lead to greater scrutiny by regulators have also emerged. Despite these concerns, The Trade Desk has stated that its efforts are primarily aimed at driving efficiency while retaining a commitment to "fair pricing and quality clearing the market". |
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