Netflix is giving advertisers more reasons to spend on its platform.
To that end, the company is expanding its advertising capabilities with new targeting and measurement tools and deeper integrations with The Trade Desk and Yahoo DSP.
Netflix also plans to expand its ad-supported tier into 15 additional countries in 2027.
Why This Matters:
The updates focus on making it easier for advertisers to reach specific audiences on Netflix and measure whether their campaigns are driving results.
First, Netflix is enhancing its Conversion API (CAPI) and introducing a new Netflix Pixel, allowing advertisers to share data on more than 20 types of conversion events, like signups or purchases. This data can be used to measure campaign performance and build audiences for targeting.
Netflix is also expanding its integrations with major DSPs. Starting next month, advertisers can use their own first- or third-party audience segments to target Netflix viewers via The Trade Desk, building on similar capabilities already available through Yahoo DSP and Amazon DSP.
On the measurement side, advertisers can now measure attribution for Netflix campaigns directly within Yahoo DSP. Similar capabilities, including reach, frequency and attribution measurement, are coming to The Trade Desk.
The updates come as Netflix looks to accelerate growth in its ad business. In yesterday’s highly anticipated earnings report, which followed major layoffs and an executive shakeup, the company lowered its annual ad revenue forecast by 10% to $2.7 billion, even as overall revenue grew nearly 12% (though its Q4 guidance fell short of expectations). The new capabilities could (fingers crossed) help Netflix attract more advertisers and capture a larger share of their budgets.
Experts React:
As Nicolle Pangis, Vice President of UCAN Advertising at Netflix, put it in the company’s announcement blog post:
“We want Netflix to be as easy to buy as it is to watch. So we’ll keep making it simple to buy, plan and measure, and continue to build alongside our partners.”
Our Take:
Netflix is trying to make its ad business look more like the broader programmatic ecosystem. We’ve seen OpenAI do something similar with ChatGPT Ads, though, if we’re being honest, it has managed to build its ad business at scale a lot faster.
It’s odd that Netflix hasn’t quite nailed it yet, given its head start and broader advertising and consumer trends. Maybe Netflix can look to OpenAI’s strategy and approach for ideas on how to rethink its own, as the AI company has certainly gone all in on ads.
AdTechRadar is owned by Chris Harihar, an EVP at Mod Op. Yahoo DSP is a Mod Op client.
