Brands pay big prices for Netflix's ad-supported service

As part of its low-priced streaming service, Netflix has included 15- to 30-second commercial breaks before and after episodes. Even while Netflix has a massive audience of over 200 million people, smaller fashion firms may be priced out of reaching that audience.

At $65 per thousand impressions, Netflix advertising is more expensive than on other platforms (CPM).

When compared to the expense of advertising on Instagram ($6.7 per CPM) or Disney+ ($50 per CPM), it's clear that Netflix is going after firms with a significant advertising budget. However, if an advertiser has the marketing budget to afford such a high cost, they more than likely want to target an audience with disposable incomes. Because they target consumers with higher disposable incomes, who are more likely to be able to afford the premium price of ad-free streaming, luxury brands may be reluctant to embrace this new Netflix advertising model.

Shares of Netflix had fallen by 66 percent from their 2021 high by June. The firm was on the fence about breaking its vow to not use advertisements by beginning an advertising campaign. Though subscriber growth is decreasing, monetization via subscription tiers and advertising will still increase revenue. When Hulu introduced its ad-supported plan in September 2020, the company made $3.5 billion between that month and the following one.