Netflix Builds Ad Tech - What Happens To Microsoft?

After solely relying on Microsoft for its ad-tech platform, Netflix said this week it will build its own advertising platform by the end of 2025 to give advertisers new ways to buy ad space and measure the impact of campaigns.

The announcement came at during its Upfront presentation Wednesday after launching an ad-supported subscription plan in November 2022, as part of a broader effort to drive revenue.

The streaming company originally partnered with Microsoft to get up and running quickly and compete with rivals like Hulu. It named Microsoft an exclusive partner in 2022.

With the launch of its in-house ad technology, Netflix plans to take control of its advertising strategy, empowering the streaming company to create targeted and personalized ad experiences for its user base of 270 million subscribers. 



Advertising executives last year told the Financial Times the company wanted to run “episodic” campaigns that would serve a series of different but related sequential ads to consumers. This would avoid a common problem of serving the same ad several times back to back.

Microsoft will now need to share its strategy and relationship with Netflix. The streaming company said during its presentation this week that this summer, it will expand its roaster of buy-side partners to include The Trade Desk, Google’s Display & Video 360, and Magnite.

Netflix executive must feel pretty comfortable with the changes. The streaming company said it now supports 40 million monthly users on its ad-supported tier globally, up from about 23 million earlier this year. In regions where ads are available, more than 40% of new users are signing up for the ad-supported tier.

The company also unveiled a list of measurement and verification partners who will help measure reach and efficacy of its ads. Affinity Solutions, DoubleVerify, EDO, Integral Ad Science, iSpotTV, Kantar, Lucid, NCSolutions, Nielsen, and TVision will support the ad measurement services. 

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