Netflix Ad Sales: The Behemoth Is Forthcoming

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Sergey Lobko-Lobanovsky, the founder and CEO of Adoppler, shared his opinion about vigorous promotion of Netflix in the sphere of ad tech. Check his point of view concerning the forthcoming changes and take part in the conversation about it on Linkedin.

As my previous message on Netflix did not seem to gain much attention, how about the following insider info. A friend of mine has recently been approached by a recruiter for a VP level position in charge of ad sales at Netflix. Listen to the sound of this: "Ad.Sales. At.Netflix". This behemoth is forthcoming, and it means a hell of a lot to all of us.

If you're a TV media executive, you should be terrified, or at least stay alert. Obviously, if Netflix has started hiring commercial digital media executives, their tech is almost ready. Chances are high that 2019 will not only be the year of CTV and OTT, it will also be the year of tremendous revenue stream disruption for everybody on the market.

Linear/broadcast TV has outdated but entrenched (and comfortable) media selling processes. And of course digital media are racing ahead with much more agile processes - primarily because they do not have legacy companies, personnel and processes to deal with. Previously, the TV industry was not much afraid of the digital world as they had high value inventory not available elsewhere, and an abundance of demand. However, this is coming to an end. The sheer amount of quality inventory Netflix is going to unleash on the market will suck in a significant portion of advertising dollars. Everybody else will be lurking around for ways to replenish their revenue stream. Undoubtedly, tough times are coming!

Source: Netflix.com

Now, there's another perspective. Netflix is a technological company, like the GAFA, and very much unlike the traditional TV industry. In the past the industry was not too concerned about ad tech. I have talked to a number of executives, and the general tune is that manual TV media sales is O'K. It has been O'K to negotiate on the phone or in person, exchange Excel-based flowcharts, and feed the IOs by the means of "file-based data import". Mind you, I am not joking. I remember being told about a trafficking workflow that included exporting data to a USB stick and carrying it to another floor on foot to feed the data into some other system. This is definitely not going to work when Netflix comes.

There have been various attempts to introduce the TV ad tech. I am not going to name any companies here, but a handful I know and have talked to either directly or through a client claim that they have "the majority" of the linear TV inventory available for programmatic buying. This is not true, to say the least. For example, if you look at the E.W.Scripps financial reports for example, combine it with the general industry knowledge, you will see they sell 90-95% of their inventory at the upfronts. In the light of this it becomes obvious why the TV ad tech has not succeeded so far. This might change as well when Netflix comes.

Anyway, this is becoming a too long of a read. Summing it all together, interesting times are coming as well as opportunities for those who are not faint at heart. I do have a recipe for the TV, but this is something I will leave for another post.

If you'd like to discuss the article with Sergey, feel free to comment on Linkedin.