In an aerial view, the Netflix logo is displayed above its corporate offices on January 24, 2024, in Los Angeles, California. (Photo: Mario Tama/Getty Images)
Netflix recently made headlines with its announcement at the Upfronts presentation of its upcoming advertising technology platform. This announcement marks a significant change in Netflix's advertising approach.
Navigating the Advertising Landscape
During its Upfronts presentation on Wednesday, Netflix revealed that it's rolling out its advertising technology platform just a year and a half after venturing into the ads realm.
This places it in direct competition with industry giants such as Google, Amazon, and Comcast, who also operate ad servers.
The announcement marks a significant shift in Netflix's advertising strategy. Initially, the company collaborated with Microsoft to develop its ad tech, allowing it to swiftly enter the ad market and keep pace with competitors like Hulu, which has had its ad server for over ten years.
By launching its proprietary ad tech, TechCrunch reported that Netflix is positioning itself to take charge of its advertising endeavors.
This strategic decision will enable the company to wield greater control over creating targeted and personalized ad experiences tailored to its vast user base of 270 million subscribers.
During a recent presentation, Netflix's President of Advertising, Amy Reinhard, announced the decision to bring the company's advertising technology in-house. Reinhard emphasized that this strategic move aims to deliver a superior advertising experience for Netflix's members.
She highlighted the importance of deep consumer research in shaping their advertising strategy, ensuring that it remains competitive and aligns with the preferences of both members and brands.
Netflix has yet to provide specific details on how its internal solution will impact ad delivery, but it's expected to shift away from standard advertisements. Netflix aims to explore "episodic" campaigns, which involve a series of ads narrating a story instead of repetitive ads.
In the presentation, Netflix mentioned enhancing its purchasing options this summer by partnering with The Trade Desk, Google's Display & Video 360, and Magnite. It's worth noting that Disney+, a competitor, also has an advertising deal with The Trade Desk.
Bela Bajaria, Netflix's chief content officer, highlighted that the platform's audience exhibits higher engagement with its content than its competitors. This engagement is pivotal for streaming success as it signifies that viewers actively choose to spend their time on Netflix.
According to Bajaria, this level of engagement leads to increased value for users, longer retention, and a higher likelihood of recommending the platform to others.
She emphasized the importance of audience engagement for content creators and partners, underlining the desire to align with platforms where viewers are most actively engaged.
Marian Lee, Netflix's chief marketing officer, highlighted that the platform's shows wield considerable influence on culture, positioning it as the prime choice for advertisers.
According to Lee, it all begins with compelling narratives that capture the attention of millions of fans. These stories then ripple through Netflix, drawing billions of views for their trailers, and extend to the platform's social media channels, which boast over a billion active followers.
