Netflix is making waves in the advertising industry with its recent announcement to launch its own advertising technology platform. This move comes just a year and a half after the streaming giant entered the ads business, putting it in direct competition with industry heavyweights like Google, Amazon, and Comcast.
Initially, Netflix partnered with Microsoft to develop its ad tech, allowing it to quickly enter the ad space and catch up with rivals such as Hulu, which has had its own ad server for over a decade. However, with the launch of its in-house ad tech, Netflix is taking full control of its advertising future.
By developing its own ad tech, Netflix aims to create targeted and personalized ad experiences for its massive user base of 270 million subscribers. This strategic move empowers the company to deliver ads with the same level of excellence that has made Netflix a leader in streaming technology. Amy Reinhard, Netflix’s president of advertising, emphasized the company’s commitment to providing a phenomenal experience for its members. She stated, “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 didn’t provide specific details on how its in-house solution will change ad delivery, it is likely that the company will move away from generic advertisements. The Financial Times reported that Netflix intends to experiment with “episodic” campaigns, which involve a series of ads that tell a story rather than delivering repetitive ads. This approach aligns with Netflix’s focus on storytelling and creating engaging content for its audience.
In addition to launching its own ad tech platform, Netflix also announced an expansion of its buying capabilities. Starting this summer, Netflix will partner with The Trade Desk, Google’s Display & Video 360, and Magnite. This move allows advertisers more options when it comes to buying ad space on the platform. It’s worth noting that competitor Disney+ also has an advertising agreement with The Trade Desk, highlighting the importance of these partnerships in the streaming industry.
Netflix took the opportunity to highlight the success of its ad-supported tier during its presentation. The company reported that 40 million global monthly active users have opted for the ad-supported plan. Within just six months of launching, the ad tier had attracted around 5 million users. This demonstrates the demand for a more affordable subscription option and suggests that Netflix’s decision to enter the ads business was well-received by its user base.
Overall, Netflix’s decision to launch its own advertising technology platform marks a significant shift in its advertising approach. By taking control of its ad tech, the company can deliver targeted and engaging ad experiences to its vast user base. With its focus on storytelling and commitment to providing a phenomenal experience for members, Netflix is poised to make a strong impact in the advertising industry.
