Netflix is currently testing new advertising formats backed by AI to create campaigns faster as it gets closer to doubling ad revenue this year on the back of programmatic.
The streaming giant released its September quarter results, with overall revenue growing 17% to $US11.51 billion. Netflix doesn't release revenue for advertising.
Co-CEO Greg Peters told analysts advertising was still small relative to the size of subscription revenue.
“But we feel like we've established the fundamentals of the business now,” he said during a briefing.
“We've proven we know how to scale. We see plenty of room for growth ahead.
“And what's making up that growth right now … we more than doubled our US upfront commitments. That lands partly in '25 and partly in '26.
“Perhaps even more importantly, though, we're seeing even higher rates of growth in programmatic. And that's more important because we believe that's going to be an increasing part of that incremental revenue contribution going forward.
“Advertisers are excited about our growing scale. We've got a highly attentive and engaged audience.
“The rollout of our ad tech stack means we've got more formats. We've got more measurement. We've got more ways to buy.
“And of course, our slate is a critical and important source of competitive differentiation. So while I'll refrain from offering any '26 guidance, I would say we are feeling good about our growth trajectory”
Netflix, in its letter to shareholders, said it is striving to create a better experience for members and help advertisers drive the best results.
In the December quarter, Netflix is using AI to test new ad formats, to generate the most relevant ad creative and placement and for faster development of media plans.
“With these advancements, we’ll be able to test, iterate, and innovate on dozens of ad formats by 2026,” Netflix said
“We’ve come a long way in building our advertising business in less than three years. In that time, we’ve gone from zero members on our ads plan to achieving sufficient scale in all 12 of our ads markets (and we’ll continue to grow from here), building out our ad sales and operations teams, and enhancing our capabilities for advertisers including launching our own first party ad tech stack (Netflix Ads Suite).
“We have a solid foundation and are increasingly confident in the outlook for our ads business.
“We are now on track to more than double our ads revenue in 2025 (still off a relatively small base) and we successfully concluded our US upfront with commitments more than doubling this year.
“With the Netflix Ads Suite fully deployed across all our ads markets for a full quarter, we now have greater opportunities for innovation like enhanced targeting and for integrating additional demand sources.”
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