Netflix's Expansion in Ad Tech: Growing Ad Tier User Base and Partnerships

Netflix's Ad-Supported Plan

Netflix's ad-supported plan has reached 40 million monthly active users. More than 40% of all signups in ads markets are choosing this plan, as revealed during its upfront event shared with Our Website.

This summer, Netflix will have The Trade Desk, Google's Display & Video 360, and Magnite as its main programmatic partners for advertisers. Additionally, Netflix revealed its plans to introduce an in-house ad tech platform.

At its second upfront event, Netflix announced exciting new content such as two NFL Christmas games. The streaming platform also shared that it has added a range of new measurement partners to enhance its offerings to advertisers.

Netflix's Growing Ad-Supported Business

Netflix's ad-supported business is experiencing rapid growth, with a significant increase in global monthly active users reaching 40 million. This number has soared from just 5 million a year ago. Additionally, nearly half of all new signups are opting for ad-supported plans where available. In a recent in-person upfront event, Netflix not only revealed a substantial lineup of new content but also provided advertisers with updates on its expanding ad offerings.

As advertisers in the streaming age focus on measuring connected TV, Netflix has added new partners like Affinity Solutions, iSpotTV, Kantar, Lucid, NCSolutions, and TVision. This expands their existing list that includes Nielsen, EDO, DoubleVerify, and Integral Ad Science, helping advertisers measure and verify the impact of their campaigns.

In the upcoming months, The Trade Desk, Google's Display & Video 360, and Magnite will join Microsoft as Netflix's main programmatic partners. Looking ahead, Netflix plans to launch an in-house ad tech platform that will offer advertisers new opportunities to purchase ads, utilize insights, and assess impact.

"We want our members to have a great experience, so we are very careful about how we show ads. Our goal is to bring better opportunities for both members and brands by staying ahead of the competition through deep consumer research," said Amy Reinhard, Netflix's president of advertising.

According to details shared by the company, measurement partners have shown that on Netflix's ad-supported tier, members tend to have a higher household income and are younger compared to linear TV audiences, with a median age of 37. More than 70% of members watch for over 10 hours a month, which is 15% higher than the closest competitor according to Nielsen. Additionally, over half watch for more than 20 hours a month. EDO reports that Netflix members are twice as likely to engage with an ad on the platform compared to other streaming services and linear TV.

"Our audiences are highly engaged, meaning they choose to spend their time watching Netflix. This is crucial because engagement is the key to success in streaming. When viewers watch our shows and movies, they find more value in Netflix, stay longer, and are more likely to recommend us to others. This is important for all of you because you also want to be where the audiences are," stated Bela Bajaria, Netflix's chief content officer, during the event.

Regarding content, Bajaria and her team have put together a diverse lineup that includes TV, film, and live sports. Netflix will be airing the NFL's two Christmas Day games this year, with plans to stream at least one holiday game annually as part of a three-season agreement. Amazon, a streaming competitor, has also included exclusive NFL games in its upfront ad presentation.

Netflix is set to release a variety of new series in 2024, including the return of popular shows like "Squid Game" and the highly anticipated Jake Paul vs. Mike Tyson boxing match. The lineup will cover drama, comedy, unscripted, documentaries, and sports, with Will Ferrell starring in his first scripted comedy series called "Golf." On the film front, viewers can look forward to a sequel to Adam Sandler's classic comedy "Happy Gilmore," a new installment in the "Beverly Hills Cop" series, and a new movie from Oscar winner Kathryn Bigelow. This diverse content range showcases what Netflix calls "the Netflix Effect" on culture.

During the event, CMO Marian Lee highlighted the power of Netflix's storytelling in creating unforgettable moments for millions of fans. She also emphasized how the platform's advertising opportunities and live events offer advertisers a chance to connect with a wider audience. Whether it's on-screen, off-screen, or during major events, Netflix is dedicated to helping advertisers reach more fans and engage with them in meaningful ways.

Editor's P/S:

Netflix's ad-supported plan is gaining traction, reaching 40 million monthly active users. This growth highlights the increasing popularity of streaming services and the shift towards ad-supported models. Netflix's focus on providing a high-quality experience for both members and advertisers is evident in its partnerships with programmatic partners and measurement companies.

The expansion of Netflix's ad offerings, including the upcoming in-house ad tech platform, provides advertisers with new opportunities to connect with a highly engaged audience. Netflix's diverse content lineup, including live sports and exclusive series, further enhances its appeal to advertisers seeking to reach a wide range of viewers. With its commitment to personalization and data-driven insights, Netflix is well-positioned to continue its growth in the ad-supported streaming market.