Discover how Netflix enters the ad server technology, aiming to compete with tech giants Google and Amazon with its innovative approach
Netflix, which debuted its proprietary advertising platform during its Upfronts presentation on Wednesday, has significantly advanced by entering the advertising technology sector.
This signifies the company’s rapid expansion into the advertising industry, which began just over a year and a half after its initial entry into the business.
This audacious action establishes a competitive environment against well-established industry behemoths with ad servers, including Google, Amazon, and Comcast.
The decision signifies a substantial transformation in the advertising approach of the dominant streaming platform. At the outset, Netflix formed a strategic alliance with Microsoft to prepare itself for the ad technology sector.
This move allowed Netflix to enter the ad space relatively quickly and gain a competitive edge over rivals such as Hulu, which had implemented its ad server more than a decade prior.
Netflix has achieved full authority over its advertising trajectory with the implementation of its proprietary advertising technology.
By employing this strategic stratagem, the organization can curate customized and targeted advertising experiences for its enormous subscriber base of 270 million.
Amy Reinhard, the president of advertising at Netflix, emphasized the importance of this transition. She stated,
“By bringing our ad technology in-house, we will be able to operate the ads plan with the same degree of excellence that has established Netflix as the current leader in streaming technology.”
Amy Reinhard, the president of advertising at Netflix
Reinhard underscored the methodical strategy that Netflix utilizes when presenting advertisements, which is informed by comprehensive consumer research.
This approach guarantees an exceptional user experience that surpasses that of competitors and creates prospects that are advantageous for both members and brands.
Although the precise details of the redesigned ad delivery system are not yet available, signs point to a departure from traditional advertising models.
According to the Financial Times, Netflix is investigating “episodic” campaigns, which interweave a narrative through several advertisements to break up the monotony of repetitive ads.
During the presentation, Netflix additionally revealed its intentions to enhance its purchasing capabilities by adding The Trade Desk, Google’s Display & Video 360, and Magnite as partners, with the expansion scheduled for this summer.
This action reflects a comparable path followed by competitor Disney+, which similarly entered into a sponsorship agreement with The Trade Desk.
Furthermore, Netflix announced its ad-supported tier’s success, attracting a substantial 40 million monthly active users worldwide.
It is worth mentioning that the ad tier amassed around 5 million users in less than six months after its inception, demonstrating its swift acceptance and appeal to consumers.