Netflix Boosts Ad Revenue with New Measurement Partners and Anti-Password Sharing

Netflix's ad effectiveness can be measured using a variety of metrics provided by its measurement partners. Lucid Impact by Cint allows the measurement of lift in brand awareness, ad recall, brand favorability, and consideration. Kantar offers similar metrics through Microsoft, Netflix’s designated ad sales partner. For business outcomes, NCSolutions provides shopper data from grocery chains and drug stores to help measure incremental sales lift among viewers who saw products advertised on Netflix. Additionally, Netflix has been working with EDO for outcomes measurement, indicating the company's ongoing investment in measuring performance and ad effectiveness.

Netflix's upfronts presentation is scheduled to take place on May 15. This will be Netflix's second upfront season, where they will likely showcase their advertising products and strategies to potential advertisers.

Netflix is focusing on increasing its ad-supported accounts as a strategy to build a more durable and healthy foundation for revenue growth across a larger base of paid members. The company is pushing more people into its ad-supported tier by banning account sharing, which has led to a 65% growth in ad-supported accounts since Q4 of the previous year. By generating more subscriptions for its ad tier, Netflix aims to attract more advertisers and increase ad revenue, which is currently not a strong contributor to the company's bottom line.

Netflix's investment in ad measurement infrastructure is significant because it demonstrates the company's commitment to providing the tools and data that advertising partners require to continue investing in the platform. A solid measurement infrastructure allows advertisers to track outcomes and measure ad effectiveness, which is essential for them to justify their ad spend. This infrastructure is also a sign that advertisers are keen to track outcomes, not just count viewers, and it helps Netflix appeal to as many advertisers as possible by addressing both ends of the purchase funnel.