At Cannes Lions, the International Festival of Advertising Creativity, the entertainment giants took the opportunity to meet and perhaps reach profitable agreements for all parties.
Google and Netflix’s possible collaboration
Last week, rumours of agreements between the Alphabet giant and The Trade Desk had leaked out as reported by AdAge. Whereas now was the time for the big players to take the field.
According to AdAge‘s report, Google is reportedly discussing an agreement with Netflix for a profitable ad collaboration (given the unpromising times and quarterly reports of the last quarters) for both companies.
Google, through Google Ad Manager (which provides online advertising services), already has partnerships with Disney for Disney Plus, the rumours have been confirmed and this indicates that the possible impasse regarding the fact that YouTube is for all intents and purposes an entertainment platform does not constitute a competition issue hindering a collaboration with the giant Netflix.
Netflix has always had a business model that is very much in vogue these days, which has also been adopted by other platforms, both entertainment (see Disney Plus) and social such as Only Fans.
The model chosen by Netflix consists of a subscription on a monthly or annual basis, which varies in cost and content, but which has lately shown some signs of weakening and made the quarterly results not the best.
The entertainment company has run for cover by choosing to modify its business plan by implementing advertisements within its content that, it has specified, will not interrupt the enjoyment of the products but will be less invasive.
This choice is substantial and puts Netflix on a par with its antagonist Disney Plus in terms of advertising insertion methodology, while differentiating it from YouTube, which opts for old-style advertising in which the user’s enjoyment of the service is momentarily interrupted in favour of Ads.
Google will also benefit from this relationship with Netflix with new revenues for its Google Ad Manager and will succeed (at least that is the intention) in meeting expectations for its second quarterly, unlike the first where, despite its 68.01 billion in revenues, it failed to meet Wall Street’s expectations at 68.11 billion US dollars.
La Croisette is also promising other deals so that not only Netflix-Google but also Google-Magnite for example or Comcast-NBCUniversal for Free Wheel, which is part of the American broadcast.
Scotts Walley’s company, founded in 1997, is running for cover with a change of strategy, and it is not certain that relations will be limited to this.
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