Advertisers: How Netflix is Coming for You

If you haven’t yet looked at Netflix as an outlet for your advertising budgets, you soon will.

Even if you haven’t, that the video-on-demand streaming platform is venturing ever deeper into ads as a revenue source won’t be news. If you have an individual or household subscription, you may well have been alerted to a change in your service, with Netflix switching you from your current, ad-free plan to a cheaper tier that will include commercial breaks.

As a marketer, that should have screamed opportunity, or at the very least it will have got you asking questions.

Netflix answered many of those at Upfront 2024, the company’s second presentation to current and potential advertisers. The event left us with little doubt about how far they’ve come and how much further they intend to go.

End-to-End is the New Black for Netflix

The company already creates the content and owns the infrastructure on which it appears. Next up is the ad tech and sales side. This will allow it to provide a bespoke offering to those in our business, including ad commissioning, formatting, and targeting, all under one roof.

Netflix is already a player. In the next year (or two, or less) they intend to become a serious one.

Netflix’s Numbers are Impressive

A reported 40 million subscribers are now on the ad-supported plan. In those markets where the tier has already been rolled out, 40% of new sign-ups are plumping for the ad-added option.

Apparently over 50% of advertised-to viewers watch more than 20 hours per month. That’s a handy little figure for those holding the purse strings to have in their pockets.

Netflix Going after Google?

Perhaps not yet. Or at least not directly

The media giant has committed to competing for a greater share of your brand’s marketing budget. At this, however, stage its sights seem set on legacy media, rather than the Mountain View behemoth.

The supplementary Upfront material mentions “linear TV” several times, pointing out how favorably its own audiences compare.

Netflix viewers are supposedly twice as likely to respond to advertising, have a higher attention span, and have a higher household income than those taking their TV via the traditional format.

And in the near-to-medium term Google is going to be more of an ally than an opponent. This was their announcement:

What that means is from this summer you will be able to purchase Netflix inventory via Google’s Display & Video 360 programmatic platforms. Other buying options will include The Trade Desk and Magnite, all of whom join Netflix’s primary programmatic partner, Microsoft.

Bigger Things on the Horizon

Less loudly trumpeted by Google is that Netflix does not intend to outsource its advertising tech for long. It will be launching its own platform by the end of next year.

“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,” said Amy Reinhard, Netflix President of Advertising.

“We’re being incredibly strategic about how we present ads,” she continued, “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.”

Netflix might not be part of your plans, but you’re very much part of their theirs.