Future of TV Briefing: Inside Netflix’s CES meetings with ad buyers

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If Netflix’s Christmas Day games were a touchdown — and they were in ad buyers’ minds — then the company is now going for a two-point conversion.

In meetings during last week’s Consumer Electronics Show in Las Vegas, Netflix presented ad buyers with its advertising road map for the year, which includes a new contextual ad product and plans to switch to its own ad tech stack, according to agency executives. And the agency executives came away from the meetings with positive things to say about the streamer.

“They had what seemed to be an impressive and aggressive road map for the first half of the year for ’25 in terms of programmatic capabilities, audience targeting, Nielsen One measurement, things like that,” said one agency executive.

“They’ve really changed the narrative around them. The Christmas Day games were a big eye-opener for a lot of people,” said a second agency executive.

“Netflix seems compelling with how fast they’re moving to market with new ad innovations and opportunities for advertisers,” said a third agency executive.

A Netflix spokesperson declined to comment.

One new ad opportunity that Netflix discussed with ad buyers during CES incorporates some of the big buzzwords in the streaming ad market: dynamic ad insertion and, of course, artificial intelligence. Netflix would tailor the delivery of ads based on the context of an adjacent scene from the show someone is watching, according to agency execs. “Imagine dynamic ad insertion not based on a pod but based on the context of a scene,” said a fourth agency executive. 

This contextual ad product was described by agency execs as similar to Disney’s Magic Words ad product that analyzes scene dialogue to determine which ad to serve in an ad break. Netflix has not yet discussed pricing for the contextual ad product and is expected to formally pitch it during this year’s upfront market, said the agency execs.

Beyond the contextual ad product, Netflix used its CES meetings to discuss ad developments that had already been announced, like its pause ad format and its plan to switch to its own ad tech infrastructure. 

Netflix will fully transition off Microsoft’s ad tech stack to its own proprietary ad tech stack in the second quarter of 2025, said agency execs. Netflix’s advertising boss Amy Reinhard announced that plan during its upfront presentation last year. Coinciding with that transition, the company highlighted in its CES meetings the option for advertisers to buy its inventory programmatically through Google’s and The Trade Desk’s demand-side platforms.

None of these ad developments are necessarily breaking new ground in the streaming ad market. But they are helping Netflix to catch up to its streaming ad rivals like Disney and Amazon.

“Parity” is the word that multiple agency executives used to describe the theme of Netflix’s pitch during CES. That may sound a little anticlimactic. But consider how the running motif around Netflix’s ad business since 2022 has been its struggle to deliver enough audience scale for advertisers. By that measure, Netflix has been able to change the conversation.

“That’s not a knock. It’s not like they are criminally behind and have been doing a bad job. It’s just the fact that they’re still relatively new, and it takes a while to build this stuff up, particularly how quickly they launched it and leaning on Microsoft and now transitioning off Microsoft. It is what it is, but it gets them to parity. I don’t want to sound too negative. Parity in terms of scale and technology in a very short period of time is impressive,” said the first agency executive.

Helping matters is the fact that Netflix’s ad prices have undercut some of its rivals. Whereas the likes of Disney’s Disney+, NBCUniversal’s Peacock and Warner Bros. Discovery’s Max have CPMs in the plus-$30 range, Netflix’s ad prices have come under the $30 mark, as previously reported by Adweek, and they have remained there, based on its meetings with ad buyers during CES. And the lower ad prices have signaled one thing to ad buyers.

“The CPMs are dropping because they have more scale,” said the fourth agency executive.

What we’ve heard

“Where do the production credits go? Where do the creator credits go? And you know what their solution is? Spend it in markets where we’re still active. They don’t want to give the money back.”

— Ad exec on what happens to ad dollars if TikTok is banned in the U.S.

Numbers to know

157 million: Number of people worldwide who use Disney+’s ad-supported tier each month.

66%: Percentage share of 3,000 surveyed people in the U.S. who said they prefer cheaper, ad-supported streamers to more expensive, ad-free options.

97 million: Number of people who use Fox’s free, ad-supported streamer Tubi each month.

>$10 billion: How much money streaming services spent on sports rights in 2024.

What we’ve covered

Ban anxiety triggers TikTok execs to rethink their next moves:

• Two top TikTok ad executives have stepped down this month.
• Agency executives have observed account reps leaving the company.

Read more about TikTok execs here.

Marketers question TikTok ban refunds ahead of Supreme Court debate:

• TikTok has told ad buyers it will refund advertisers for reserved inventory if the app is banned in the U.S.
• But it will not return production or creator credits to advertisers.

Read more about TikTok refunds here.

Why creators’ pushback against Honey is about more than skimmed affiliate revenue:

• The PayPal-owned browser extension allegedly siphoned affiliate revenue from creators.
• The move likely depressed the affected creators’ affiliate stats.

Read more about creators’ Honey pushback here.

Mars Petcare is testing direct SSP buying for CTV ads:

• The CPG brand is experimenting with using PubMatic instead of Google’s and Yahoo’s demand-side platforms to source CTV ad inventory.
• The brand’s hypothesis is that consolidating the programmatic supply chain can cut down on ad tech fees.

Read more about Mars Petcare’s CTV strategy here.

Omnicom Media Group and Roku partner on viewer search data:

• The agency holding company will use the CTV platform’s viewer search data to inform clients’ ad spending decisions.
• The data includes the most searched programs, content categories, genres and performers.

Read more about OMG’s Roku deal here.

What we’re reading

Disney-Fox-WBD cancel Venu:

The sports-centric streamer joins the rank of CNN+ and Quibi as a hyped streaming service that was not long for this world, with Disney, Fox and Warner Bros. Discovery opting not to launch Venu after all, according to CNBC.

Creators license videos to OpenAI & Google:

With OpenAI and Google rolling out AI video generation tools, they are paying creators to license their videos to use for training the AI models, according to Bloomberg.

TikTok ban looks likely:

By the time you’re reading this or soon after, the Supreme Court may have formally decided on whether to uphold the law forcing ByteDance to sell the app or have it be banned in the U.S., and the court seems likely to do just that, according to The New York Times.

Twitch streamers boomerang back:

After their exclusivity deals with Twitch rivals YouTube and Kick expired, top streamers are returning to the Amazon-owned livestreaming platform, according to Bloomberg.

Amazon eyes more news shows:

After streaming an election night special on Prime Video, the e-commerce giant is exploring further investing in news programming, according to Variety.

How many ads do streamers actually air?:

Streaming services’ ad loads seem like moving targets, so Sherwood News’s Jon Keegan took a non-scientific sample of how many ads top streamers actually have viewers sit through.