What's Happening?
Netflix has launched a new advertising metric called 'monthly active viewers' (MAV) to provide a more comprehensive measure of its global ad audience. This metric accounts for co-viewing, which Netflix describes as a more complete representation of audience reach
compared to the previous 'monthly active users' (MAU) metric. MAV is calculated by multiplying the number of members who have watched at least one minute of ads by the estimated average number of people per household. The company claims that its ads now reach over 190 million monthly active viewers globally. This move is part of Netflix's strategy to enhance its advertising business, which is on track to more than double its ad revenue by 2025.
Why It's Important?
The introduction of the MAV metric signifies Netflix's commitment to expanding its advertising business, which is crucial for diversifying its revenue streams beyond subscriptions. By providing advertisers with a more accurate measure of audience reach, Netflix aims to attract more brands to its platform. This could lead to increased competition in the streaming industry as other platforms may adopt similar metrics. The expansion of demographic targeting options and the testing of interactive video ads also highlight Netflix's efforts to offer advertisers more precise and engaging tools, potentially setting new standards in the streaming ad market.
What's Next?
Netflix plans to continue expanding its advertising capabilities, with the potential for MAV to become an industry-wide standard. The company is also enhancing its ad stack, allowing advertisers to buy placements directly through its platform. As Netflix continues to refine its advertising offerings, it may face reactions from competitors and advertisers who will be closely watching the effectiveness of these new metrics and tools. The success of these initiatives could influence the broader streaming and advertising industries, prompting other companies to innovate their ad measurement and targeting strategies.
