Netflix revealed during its Upfronts presentation on Wednesday that it is rolling out its own advertising technology platform, marking a swift move into the ad business just a year and a half after its debut.
This positions Netflix in direct competition with industry giants like Google, Amazon, and Comcast, who have established ad servers.
The announcement signals a significant shift in the streaming giant’s advertising strategy.
Initially, Netflix collaborated with Microsoft to develop its ad tech, enabling a rapid entry into the ad space and catching up with competitors such as Hulu, which has operated its ad server for over ten years.
By launching its in-house ad tech, Netflix aims to assume full control over its advertising trajectory.
This strategic maneuver empowers the company to curate targeted and personalized ad experiences tailored to its extensive user base of 270 million subscribers.
“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,” stated Amy Reinhard, Netflix’s president of advertising.
“We’re being incredibly strategic about how we present ads because we want our members to have a phenomenal experience.
We conduct deep consumer research to make sure we stay ahead of the competition, bringing opportunities that are better for members and better for brands.”
While Netflix did not provide specific details on how its in-house solution will alter ad delivery, it is likely to pivot away from generic advertisements.
Netflix intends to use “episodic” campaigns, featuring a series of ads that narrate a story rather than repetitive ones.
During the presentation, Netflix also announced plans to expand its buying capabilities this summer, adding The Trade Desk, Google’s Display & Video 360, and Magnite as partners. Notably, competitor Disney+ also has an advertising agreement with The Trade Desk.
Netflix also highlighted the success of its ad-supported tier, reporting that 40 million global monthly active users have opted for the plan. Within six months of its launch, the ad tier had attracted around 5 million users.
