The Information has a piece about how "Netflix’s decision to launch an advertising-supported version is a risky move that flings the giant into a business it has resisted for years. But the push—scheduled for next year—has one thing going for it: Advertisers are thirsty for more ways to reach people watching streaming TV and movies online."
The story notes that "cord cutting has left brands with a supply-and-demand problem. As broadcast and cable viewership diminishes, traditional TV advertising isn’t reaching as many people, and networks are packing in the ads to avoid steep revenue declines. But streaming services like Hulu, Roku and HBO Max are selling ads sparingly so as not to alienate watchers."
You can read the entire piece here.
- KC's View:
To me, this story is worth reading because there are so many retailers developing their own media platforms, hoping that advertising will bring a new and lucrative revenue source. But Matt Spiegel, executive vice president of digital marketing at TransUnion, which partners with ad-buying firms to better target their ads, makes an important point:
“This pie does not grow endlessly.”
Spiegel says that "Netflix, if it can scale, will pull from the same ad market as network and cable television." And from retail media platforms.
Not only doesn't the pie not grow endlessly, but there also are a limited number of existing slices.