Netflix grants a 25% rebate to French advertisers

Three key points are echoed the week on the advertising front

- The announcement of the French advertising market results for the first half of the year marks a new surge in digital (up 19.3%), and even more so in digital video (social video + display video: +57% compared to 2021, and +161% compared to 2018).

- An increase in the power of addressed advertising that does not seem to be sufficient to stem the tide, even though its revenues should quadruple by 2022 in France, to €20 million (NPA estimate, based on data provided by the SNPTV for the first half)

- Information continues to filter out regarding the conditions proposed to advertisers by Netflix, as part of its new offer with advertising: according to information gathered by NPA Conseil, its teams would evoke, for France, a CPM of €49 (the same amount in dollars), 25% lower than the levels evoked in the United States ($65) and the United Kingdom (57 GBP, equivalent to current exchange rates).?

Netflix thus seems to be taking on significantly lower market prices in France than in the US and the UK (a difference of almost 1 to 2, for example, between national DTT channels and US networks). The group also seems to be more accommodating about the minimum commitment amounts required from advertisers: one million euros in France, ten times less than in the United States.

By recalibrating the €49 rate to the projection - not forecast - established by NPA Conseil, the potential revenue would be close to €150 million, assuming a conversion rate of 30% of the subscriber base.?

On the occasion of the release of the results of the BUMP study, NPA Conseil also drew up a broader overview of the international advertising situation.

While the global advertising market was expected to return to strong and sustainable growth until the beginning of 2022, after the low point caused by the pandemic, the major media agencies revised their projections downwards mid-year. The expected growth remains solid in 2022, above 8%, even if it will be uneven across the world. But a sharp slowdown is expected in 2023. Digital advertising will continue to take market share from traditional media. Television will return to pre-pandemic growth levels of less than 5%. Advertising tends to shift to AVoD services, FAST channels and Connected TV, pending the arrival of screens soon to be marketed by Netflix and Disney+?