The next frontier for AI is advertisement. While some companies are already experimenting with AI-powered advertising formats, more and more will hop on the bandwagon to increase revenue and ideally make ads more lucrative for companies and better for users as well.
Netflix announced a push into AI-drive advertising, which it calls creative formats, just this week. The main idea is to improve advertising results with the help of generative artificial intelligence. The new ad-powered plans have pushed Netflix subscribers and revenue to new heights and there is seemingly no end to the growth just yet.
For users, the new formats could lead to more ads that try new tricks to get them to click and make a purchase.
Creative Ad-formats incoming
The first creative formats that come out of Netflix’s new modular framework for ads are interactive midrolls and pause ad formats. These introduce custom advertising creatives with “added overlays, call to action, second screen buttons, and more” to serve “the right ad to the right member at the right time”.
Netflix revealed that these new formats will become available in all countries in which the ad-supported Netflix plan is supported. The company plans to finish the rollout by 2026.
Does that mean that Netflix subscribers, who are subscribed to an ad-powered plan, will see more advertisement in the future? It sounds like it. Pause ads, for instance, are a new ad format that pushes advertisement to the screen when the viewer hits the pause button on the remote. That is one ad that has not been displayed before.
The new creative mid-roll ads, which Netflix says are interactive, are also new. It is possible that these are deducted from the hourly playtime of advertisement on Netflix, but Netflix has not commented on any of that at this stage.
Closing Words
AI-powered advertisement could introduce another issue to Netfix subscribers, besides increasing ads on the platform. AI may optimize ads and placements of ads to increase user engagement. In other words, it could lead to an increased spending by users by exploiting emotions or using other psychological tricks.
If you want my advice, it is better to sign-up for a single month or two of ad-free viewing on Netflix per year than to subscribe to the streaming service for an entire year. You could subscribe to other streaming services for a month or two as well each year. You will save quite a bit of money doing so, and the only downside is that you may not be able to view a particular show or movie when it comes out.
Now You: are you subscribed to ad-powered plans at Netflix or other streaming services? What is your take on these plans in general? Feel free to leave a comment down below.
Yes, I do this… The ads do not really bother me, but I do not care for the select which one to watch ads.
I have no cable tv. I sub on a black friday sale to one service for year at large discount (this year the one I subbed cost was $1.12 monthly tax and fees included). Then dop it and rotate to a different subscription service the next year. Then do another one or two for some other service drop it and switch to another service. Ialso use free services as there are some very good ones. My streaming cost per year not incluing Internet have been averageing $180 a year with an antenna for local channels.
But is any streaming platform has true ad-free tier? From what I hear, many services use legalize to insert ads in ad-free tiers. Hulu is one example of that.
I just recently watched Black Mirror S07E01 “Common People”.
It illustrates this subject perfectly.