Prices rise for the Digiday Programmatic Marketing Summit after Mar. 24
Netflix’s ad business appears to have finally found a balance between market expectations and the reality of brand advertising needs. According to WARC, the streamer’s share of the global CTV ad market is set to more than double in size this year, rising from 3.7% at the end of 2025 to 9.2% by 2027.
That isn’t a coincidence. According to four media agency execs who spoke with Digiday, it’s the result of prices stabilizing, growing advertiser confidence in Netflix as an ad platform, an expanding slate of live sports programming and increased access for programmatic investments through partnerships like that struck last year with Amazon’s demand-side platform (DSP).
Those factors are leading the streamer to increase its share of the already growing CTV market, noted David Dweck, president at media agency Go Fish. “We are seeing clients leaning in far more CTV,” he said.
“Netflix is essentially a growing player in a largely stagnant total TV pool,” said Celeste Huang, media insights analyst, WARC Media. “While brands adopt TV digitalization, overall CTV growth remains modest compared to online video and social media. However, it’s possible that Netflix’s momentum could unlock new demand and expand the entire CTV market in ways other VOD players haven’t achieved.”
Despite brands continuing to shift ad spend from linear into CTV, and cord-cutting among viewers becoming the norm, streaming platforms’ embrace of advertising hasn’t been a smooth transition.
As such, Netflix’s first forays into advertising in late 2022 saw brands and buyers work to whittle down the streaming leader’s pricing, halving its initial $60 CPM bar — and the streamer struggling to match the data-rich offering of rival streamer Amazon Prime Video.
“They came in fast and hard with incredibly high CPMs, with very limited targeting capabilities, … [and] with very limited measurement. And they were trying to play in a space where there was already available premium inventory that advertisers were buying,” recalled Rita Steinberg, vp of media at full service agency FUSE Create.
Over time, the company has filled in between the lines and added more formats, measurement capabilities and expanded programmatic access. According to PMG’s head of CTV & video strategy Mike Treon, Netflix’s partnership with DSPs such as Amazon’s has made it more attractive to the long-tail of mid-sized advertisers. The increasing spend flowing toward Amazon’s DSP, he noted, provided a “compounding growth factor” for Netflix.
Recent moves, such as launching a monthly active viewers (MAV) metric, serve to cement its position as a platform that gives brands a chance reach whole households, not just individual users, noted Steinberg.
The latest projections suggest Netflix’s ad business has turned a corner since its rocky start.
Three years on, Netflix’s ad business accounts for 3.3% of its total revenue and brought in $1.5 billion last year. There’s plenty of headroom to grow into, according to estimates from Omdia, which project its 2030 ad turnover at $8 billion.
Gregory K. Peters, Netflix’s co-CEO, president and director, told analysts during the company’s recent earnings call that Netflix plans to steadily increase the number of measurement options and commercial formats, including interactive ads, over time .
“We continue to invest in more sales, more go-to-market capabilities. That’s a direct driver of advertising growth,” he said.
Not every media expert projects such an upward curve for Netflix’s ad revenues. WPP Media, for example, projects its 2027 market share at a more conservative 8%.
Nidhi Shah, global business intelligence analyst, WPP Media, said in an email that several factors could hold Netflix back: “Increasing competition from digital aggregators like Amazon and Apple, the reality that not all declining linear ad revenue will shift to streaming platforms such as Netflix, and the risk that a collapsed Warner Bros. Discovery deal could compromise their content catalogue.”
Netflix also has a “notable gap” in its content distribution options, relative to competitors, added Shah.
Should its proposed merger with Warner Bros. Discovery go through, however, it’s all upside.
Details aside, larger inventory and a large collective audience would likely turn the company from an “option” into “a necessity” on media plans, noted eMarketer analyst Marisa Jones. “That will make Netflix the most important buy in paid subscription screenings by a long shot,” she added.
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