Netflix announced at Upfronts on Wednesday that it is launching its own ad tech platform just a year and a half after entering the ad business. The move puts it at odds with other ad-server heavyweights such as Google, Amazon and Comcast.
The announcement marks a major shift in the streaming giant’s advertising approach. The company initially partnered with Microsoft to develop ad technology, allowing Netflix to quickly enter the ad space and catch up with rivals like Hulu, which has had its own ad server for over a decade.
With the launch of its in-house ad tech, Netflix is poised to take full control of its advertising future. This strategic move will enable the company to create targeted and personalized advertising experiences that will resonate with its massive user base of 270 million subscribers.
“Bringing our ad technology in-house will allow us to enhance the advertising plan with the same level of excellence that has made Netflix the leader in streaming technology today,” said Amy Reinhard, president of Netflix’s advertising division. “We’re incredibly strategic about how we present ads because we want our members to have an amazing experience. We conduct deep consumer research to ensure we stay ahead of the competition, bringing opportunities that are better for members and better for brands.”
Netflix hasn’t said exactly how its internal solution will change how ads are served, but it’s likely to move away from generic ads. According to the Financial Times, Netflix wants to experiment with “episodic” campaigns, which include a series of ads that tell a story rather than running repetitive ads.
During the presentation, Netflix also noted that it will be expanding its buying capabilities this summer, which will now include The Trade Desk, Google’s Display & Video 360, and Magnite as partners. Notably, competitor Disney+ also has an advertising deal with The Trade Desk.
Netflix also touted the success of the ad-supported tier, reporting that 40 million active users worldwide opt into the plan. The ad tier had about 5 million users within six months of its launch.
