Netflix, which entered the advertising arena only a year and a half back, is now taking the fight to the likes of Google, Amazon, and Comcast in the advertising landscape – the streaming giant announced that it will roll out its own in-house adtech platform. This decision comes alongside impressive growth figures for its ad-supported tier.
So far, Netflix has been reliant on tech titan Microsoft as its primary partner for adtech solutions. However, by building its own adtech infrastructure, Netflix seeks to gain greater autonomy and control over its advertising operations. An in-house platform will enable the company to develop targeted and personalized ad experiences that cater more effectively to its massive user base of 270 million subscribers. The platform is expected to be rolled out by the end of 2025.
“Bringing our ad tech in-house will allow us to power the ads plan with the same level of excellence that’s made Netflix the leader in streaming technology today,” Amy Reinhard, Netflix president of advertising, announced in an official statement. As of now, the details of the in-house platform remain undisclosed. Furthermore, while developing its in-house platform, Netflix is broadening its partnerships with established adtech players. The Trade Desk, Google Display & Video 360, and Magnite will join forces with Microsoft to facilitate automated ad buying on the platform.
The launch of Netflix’s in-house adtech platform has the potential to be a significant development for the streaming giant. For one, as mentioned earlier, by taking control of its adtech, Netflix gains greater autonomy over its advertising operations. This allows them to experiment with different ad formats and tailor them to their specific user base, potentially leading to more effective advertising that generates higher revenue. This could involve features like “episodic campaigns” (as per reports) that tell a story rather than simply repeating the same ad. For another, if Netflix has its own adtech platform, then the streaming giant will be able to collect valuable data on user behavior within the ad experience. This data can be used to create more targeted and personalized advertising, potentially leading to increased ad effectiveness and user engagement with the ads.
And if this is not enough, Netflix is also venturing into the realm of live events. The company recently secured the streaming rights for two National Football League games on Christmas Day. Live events, particularly in the realm of sports, have traditionally been a powerful draw for viewers, and Netflix is well-positioned to capitalize on this trend. Netflix noted that it will “streaming at least one Christmas Day game in 2025 and 2026.” This development comes at a prime time, when the user base for Netflix’s ad-supported tier has witnessed phenomenal growth, reaching a staggering 40 million monthly active users globally. This figure marks a significant leap from the mere 5 million reported just a year ago. Furthermore, in regions where the ad tier is available, over 40% of new sign-ups opt for this cost-effective option. A vast majority of Netflix’s ad-supported members watch for more than 10 hours a month, the streaming giant noted.
“Our audiences are highly engaged — and by engaged I mean that they are choosing to spend their time watching Netflix. That’s important because engagement is the key to success in streaming. When people watch our shows and movies, they get more value from Netflix, they stick around longer, and they’re more likely to recommend us to their friends. And this matters to all of you because you want to be where the audiences are, too,” Bela Bajaria, Netflix’s Chief Content Officer, revealed in the official statement.
