“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is by Ken Weiner, CTO at GumGum.
Up until recently, Netflix’s climb to the top as kingpin disruptor of the small-screen had been relatively unblemished. But faced with waning subscribers, the streaming giant has been forced to adapt.
In a game-changing move for the market, Netflix just launched its ad-supported tier, offering a Basic with Ads plan across the U.S. and other countries. Charging a rumored $65 CPM with a $20 million minimum annual spend, Netflix has gone big, commanding rates that are more expensive than other streaming giants.
Many advertisers have jumped at the chance to align themselves with the platform’s huge closed-loop content inventory and global audience reach. Yet there are still unanswered questions over how Netflix and other AVOD streaming contenders will successfully navigate brand safety for a highly sensitized market.
Risk versus reward
Netflix may have an ace up its sleeve with its premium customer experience. But, like other broadcasters with AVOD models (including Hulu, Paramount+ and Peacock), it must now grapple with how to protect brands from controversial content.
After all, the brand’s most-watched shows this year include “The Watcher,” “28 Days Haunted” and, most disturbingly for advertisers, the ultra-violent “Dahmer – Monster: The Jeffrey Dahmer Story,” a graphic retelling of the serial killer’s infamous murder spree.
Not only do these programs carry the risk of reputational damage – “Dahmer” has already attracted complaints from victims’ families – but they’re also entirely unsuited to family brands. Netflix has ruled out running ads on kids’ shows, but that potentially leaves a large swath of middle-ground brands stranded in between. Many will want to make the most of bespoke ads, while weighing the gamble of potentially untested and unpredictable inventory.
Having fast-tracked its ad model, there is still very little detail on how Netflix will handle diverse ad contexts or safeguard brand suitability within its vast, international content repertoire.
Playing catch-up
What we know is that Netflix will run ads for four minutes per hour of content in a way that’s relevant to the accompanying creative. There’s a sense that this should somehow be enough for brands keen to cash in on the novelty and prestige of Netflix advertising. But that won’t be sustainable.
Such is the rate of growth in CTV that ad tech has struggled to keep pace. And with the AVOD sector growing by the day, it’s not just Netflix but all media players in this space that should be examining the implications of that gap.
Video streaming still relies on very basic metadata that cannot pick up on vital nuance within videos. Developments in machine learning may be helpful here through tech that can automatically break down video content on a frame-by-frame level to better understand the nature of a video and its suitability for advertising.
Similarly, progressions in AI may allow for “intra-video metadata” (i.e., tags that describe the content adjacent to each ad marker within CTV video, providing a rich level of detail on that excerpt). So instead of avoiding a film altogether because of the risk of violent or graphic scenes, advertisers would be able to identify where and when the threat actually occurs and avoid it.
A new kind of model
To give brands this level of reassurance around streaming, however, the industry needs to demand a more robust and consistent solution. This should prioritize CTV brand safety, but also signpost transparent targeting, analytics and third-party tracking options.
Netflix’s partnership with UK ratings agency BARB, which will publish daily streaming and monthly reach figures, is one small step in the right direction for transparency. A more cohesive framework for brand safety, however, is still to come. Industry bodies such as the IAB are likely to play a major role in creating a standardized set of practices.
CTV is still largely uncharted territory for the ad industry. But it’s an area we rapidly need to master to protect consumers and brands, while creating a rich ecosystem that will benefit our entire industry.
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