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. MAV is calculated by multiplying the number of members who have watched at least one minute of ads in a month by the estimated average number of people per household, based on Netflix's first-party research. The company reports that its ads now reach over 190 million monthly active viewers globally. Previously, Netflix used the monthly active users (MAUs) metric, which only counted the number of profiles watching ads. The new MAV metric aims to better capture the communal nature of Netflix viewing, which often involves multiple viewers per account.
Why It's Important?
The introduction of the MAV metric is significant as it reflects Netflix's growing focus on its advertising business, which is on track to more than double its ad revenue by 2025. This move is crucial for Netflix as it seeks to diversify its revenue streams beyond subscriptions. The MAV metric could potentially become an industry standard, providing advertisers with a more accurate measure of ad reach in streaming services. This development is likely to attract more advertisers to Netflix, as it offers a clearer picture of the audience size and engagement. The expansion of demographic targeting options and the testing of interactive video ads further enhance Netflix's advertising capabilities, making it a more attractive platform for brands looking to reach specific audiences with precision.
What's Next?
Netflix plans to continue expanding its advertising capabilities by offering more precise demographic targeting options, including education, marital status, and household income. This will allow advertisers to reach audiences with greater precision. Additionally, Netflix is testing interactive video ads with call-to-action prompts tailored to viewing behavior, which could provide a more personalized experience for viewers. As Netflix continues to refine its advertising strategies, it is likely to see increased interest from brands and advertisers looking to leverage its large and engaged audience. The success of these initiatives could set new standards for advertising in the streaming industry.
