Netflix unveils own ad tech to rival Google, personalizes ads for 40M users

During its Upfronts presentation on Wednesday, Netflix unveiled this significant advancement, marking a pivotal moment just eighteen months after its initial foray into the advertising sphere. By venturing into ad-serving technology independently, Netflix positions itself among other industry powerhouses such as Google, Amazon, and Comcast.

Netflix's decision to cultivate its in-house advertising technology promises to deliver ads that are more personalized and better aligned with the preferences of its vast subscriber base, which totals over 270 million individuals. Amy Reinhard, the president of Netflix's advertising division, underlines the ambition to execute advertising efforts with the same level of excellence that has established Netflix as a frontrunner in the streaming industry.

Reinhard emphasized enhancing user experience, revealing that Netflix actively engages in comprehensive consumer research to stay ahead of its competitors. The platform's pursuit of proprietary technology is expected to lead to advertisements that break away from the generic and embrace the experimental, including "episodic" campaigns that narrate a story rather than inundate users with repetitive content.

In its presentation, Netflix shared plans to broaden its advertising prowess, involving partnerships with entities like The Trade Desk, Display & Video 360 by Google, and Magnite. This indicates Netflix's openness to collaborations despite its venture into developing proprietary advertising technology.

The company proudly announced that its ad-supported subscription model has proven to be a hit, attracting 40 million active users each month since its debut. This achievement, reached in just half a year, illuminates the untapped potential of ads within the streaming domain and underscores Netflix's proactive stance in leveraging this opportunity.

Netflix launched its "Basic with Ads" subscription option on November 3, 2022, initially available in the United States and 11 other countries. By July 2023, Netflix phased out its lowest-priced ad-free plan in significant markets like the US and UK for new and returning customers, leaving them with a choice between a pricier ad-free experience or the more affordable, ad-inclusive option. Existing subscribers to the basic plan without ads could maintain their current service, provided they didn't switch plans or cancel their subscriptions.

Netflix's strategy to gradually eliminate the primary, ad-free option will soon expand beyond the US, UK, and Canada. 2024, it plans to introduce this change in Germany, Spain, Japan, Mexico, Brazil, and Australia. This move seeks to boost the user base for its ad-supported plans, which, to date, account for 40% of all new sign-ups in available markets.