Netflix challenges Google and Amazon with new ad tech platform
Netflix announced the launch of its own advertising technology platform, marking its complete independence in this arena. The company aims to craft more personalized advertisements, pitching itself against giants like Google and Amazon. Within six months of rolling out the ad-supported plan, Netflix attracted an impressive 40 million active users each month.
16 May 2024 06:48
At its Wednesday Upfronts presentation, Netflix unveiled its new advertising technology platform. This development comes around eighteen months after the streaming behemoth joined the advertising fray. This bold step pits Netflix against other industry heavyweights boasting ad servers, including Google, Amazon, and Comcast.
TechCrunch highlighted the significance of this move, suggesting it could transform Netflix's approach to advertising fundamentally. Originally pairing with Microsoft to forge its advertising technology, Netflix now proclaims its total autonomy in this sphere.
Netflix promises less generic, more personalized ads
Deciding to develop its advertising technology in-house opens doors for Netflix to offer advertising experiences that are more personalized and tailored to its vast subscriber base of over 270 million. Amy Reinhard, president of Netflix's advertising division, stressed a clear goal driving these initiatives. The aim is to ensure advertising campaigns are delivered with the same excellence that has established Netflix as a streaming tech leader.
Reinhard mentioned that prioritizing an exceptional user experience is paramount for the company. Hence, Netflix is delving into extensive consumer research to outmaneuver its rivals. The company announced that owning its platform will allow for less generic and experimental advertisements. For instance, "episodic" campaigns that narrate a story, as opposed to bombarding users with repetitive ads.
As many as 40 million users opt for Netflix with adverts
In its presentation, Netflix also revealed plans to broaden its advertising reach. This will include partnerships with The Trade Desk, Display & Video 360 by Google, and Magnite. This indicates that despite erecting its advertising infrastructure, Netflix remains open to collaborations with external platforms.
The company also highlighted during its presentation that its ad-supported subscription model is a resounding success. Globally, it garnered as many as 40 million active users monthly, a milestone reached within six months of introducing this plan. This achievement casts new light on the potential of ads in streaming. While recognizing this potential, Netflix is boldly advancing to optimize it.
How Netflix “encourages” users to opt for plans with adverts?
Netflix launched its ad-supported subscription model, "Basic with Ads," on November 3, 2022, in the United States and 11 other countries. Then, by July 2023, it discontinued the cheapest ad-free option in the US and UK for new and returning members. Consequently, individuals were nudged to choose between the pricier ad-free plan and the more affordable option with ads. Those subscribed to the basic plan without ads can continue using it, provided they don't switch plans or cancel their subscription.
Netflix intends to eliminate the basic ad-free plan in other regions gradually. This strategy began in the US, UK, and Canada, with plans to extend these changes to different markets by 2024, including Germany, Spain, Japan, Mexico, Brazil, and Australia. This shift aims to boost the subscriber base for ad-supported plans. These account for 40% of all new sign-ups in the available regions.
