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Netflix announced to launch its own ad server gain full control over its advertising future and creating targeted, personalized ad experiences for its 270 million subscribers.
Netflix's decision to launch its own ad server is a strategic move aimed at gaining full control over its advertising future and creating targeted, personalized ad experiences for its 270 million subscribers.
Partnered with Microsoft.
Originally, Netflix partnered with Microsoft to expedite its entry into the ad space, allowing it to quickly develop its ad tech and catch up with competitors like Hulu, which has had its own ad server for over a decade. This collaboration enabled Netflix to swiftly establish itself as an advertising channel and gain a foothold in the market.
“Bringing our ad tech in-house will allow us to power the ads plan with the same level of excellence that’s made Netflix the leader in streaming technology today,” said Amy Reinhard, Netflix’s president of advertising. “We’re being incredibly strategic about how we present ads because we want our members to have a phenomenal experience. We conduct deep consumer research to make sure we stay ahead of the competition, bringing opportunities that are better for members and better for brands.”
Rapidly Growing User Base
In a recent announcement, Netflix reported that its ad-supported tier has achieved tremendous success, reaching 40 million global monthly active users. This significant milestone marks a substantial increase from the 5 million users a year ago, and 23 million in January 2024.
High Engagement
Netflix's ad-supported tier is outperforming its competitors in terms of user engagement and attention.
Nielsen reports that more than 70% of Netflix's ad-supported members watch content for over 10 hours per month, which is 15 percentage points higher than the nearest competitor.
Netflix subscribers pay even more attention three hours into watching than they do when they first start, making them around twice as likely to respond to an ad compared to other streaming services and linear TV.
Who is the Competition
Netflix has entered the arena alongside established players like Google, Amazon, and Comcast, who have their own ad servers.
