Netflix is talking up its burgeoning ad business’ successes in a new blog post by Amy Reinhard, the company’s President of Advertising. According to Reinhard, during Netflix’s second year of Upfront sales, the company closed deals with all major holding cos and top independent agencies, with a 150%-plus increase in commitments compared to the prior year. These results were “in line with our expectations,” according to Netflix, which feels like… underselling.
Netflix, having already dominated subscription-based streaming, has immediately established itself as a powerhouse on the ads side.
Why This Matters:
Netflix is crushing it in SVOD streaming and is second only to YouTube in overall streaming platform viewership, according to Nielsen. YouTube accounts for about 10% of all TV viewership in the U.S. on a monthly basis, while Netflix ranks second at just under 8%. However, Netflix is very clearly making strides in free ad-supported content, as seen with today’s news.
Reinhard’s blog also touts the upcoming launch of its in-house adtech platform, which will first be tested in Canada this November, then rolled out globally in 2025. And, the company outlined a range of existing and soon-to-be-released capabilities focused on buying and measurement, featuring a who’s who of adtech partnerships.
For buying, marketers can set up private 1:1 marketplace deals through The Trade Desk, DV 360, and Xandr, with programmatic guaranteed options launching in November. For media quality and verification, Netflix is collaborating with Google’s Campaign Manager 360 and Innovid, while enhancing its programmatic fraud detection and viewability through partnerships with DoubleVerify and IAS. Netflix’s platform has already run campaigns for major brands like Expedia, Ford, and T-Mobile, with availability in the U.S., Canada, Brazil, and Mexico, and plans for global expansion.
Netflix is enhancing its measurement through new partnerships, as well. In the UK, the ad-supported plan will be integrated into Barb’s Advanced Campaign Hub. The company plans to expand its measurement suite to include NielsenOne, Lucid/Cint, EDO Inc., NCSolutions, Kantar, and Affinity Solutions. For data security and privacy, Netflix has partnered with clean room providers Snowflake, InfoSum, and LiveRamp, allowing advertisers to analyze audience overlap, reach, frequency, and attribution in a secure environment.
If you’re not on this list, it is okay to be envious. You could be soon, however, as Netflix is clearly building an interoperable, cross-platform product to support all brands and buyers.
Experts React:
In the blog post, Reinhard noted that, “Over the last few months, we’ve hit great milestones for our ads business, including closing another successful Upfront market, building and implementing an expanded programmatic suite, enhancing our global measurement capabilities, and securing impactful global ad campaigns. We’ll continue to improve the Netflix ads plan to ensure our members are delighted by the experience while simultaneously creating solutions that deliver results for our marketers, putting brands at the center of the best shows and films in the world, reaching a highly valuable and engaged audience.”
Meanwhile, Michael Miraflor of Hannah Grey VC, an expert on marketing, noted via X, with Netflix, the “war is all but over,” and that “Netflix in the long term will become more like Disney than Disney can become more like Netflix.” This is because “streaming dominance with growing ad revenue is a more solid foundation than noteworthy IP and revenues from physical properties.”
Our Take:
A key thing to remember: Netflix’s ARPU for its AVOD tier is higher than for its SVOD tier.
That means the ad-supported model generates more revenue per user compared to the traditional ad-free subscription. Expect Netflix to continue to invest in the ad product and its adtech, and go beyond The Trade Desk, DV360, and Xandr to scale programmatic buying, while keeping measurement a top priority. As advertisers increase their spending—especially at the premium commanded for Netflix inventory—delivering on media quality and proving ROI will be crucial.
By the way, the ad success reported by Netflix also led to a record high in the company’s share price.
