Join us Oct. 26-28 in Newport Beach for the Digiday Media Buying Summit
Subscribe: Apple Podcasts • Spotify
Netflix’s ad business is starting to look less like an experiment and more like a serious contender for ad budgets. The streaming giant is striking deals via new upfront structures, expanding its ad tech and rolling out unique content opportunities.
All said, Netflix is aiming to build a bigger, more differentiated ad product — one that will disrupt the streaming ad market.
“Netflix had a tough start with its ad business four/five years ago,” Tim Peterson, Digiday executive editor, video and audio, said on a recent episode of the Digiday Podcast. He added, “It feels like in the past year plus, Netflix has had a real glow up on the ad side of things.”
The company’s recent earnings prove it. Netflix’s revenue reached $12.25 billion, up from 16.2% from the comparable 2025 quarter.
Turnaround plan
When Netflix’s ad business first launched in 2022, it was a rocky start plagued with high CPMs, limited inventory and other advertiser gripes. The streaming giant’s turnaround came in 2024, during its Christmas Day NFL coverage. Ad inventory sold out weeks in advance, proving Netflix’s live sports ambitions were coming into focus.
Netflix has been on a roll since then.
As of late, the streamer has been expanding its joint business planning (JBP)-style deals to more advertisers, asking them to double their spend on the platform. The deals offer advertisers the opportunity to lock in inventory before those opportunities are made available to advertisers in the upfront, per Peterson.
Programmatic buying on the platform has seen its own glow up — in large part thanks to its move to in-house its ad platform last year. As per its latest earnings, Half of Netflix’s non-live ad revenue is made up of programmatic buying through third-party DSPs, including Amazon, Google DV360 and Trade Desk.
“That’s really opened it up to smaller- and mid-sized advertisers,” said Sam Bradley, senior marketing reporter at Digiday. Bradley also joined the Digiday Podcast to discuss Netflix’s growing ad business. He added, “A lot of those folks are looking to CTV and TV for the first time anyway, but they’re looking at Netflix quite favorably.”
Pricing has come down from an initial $60 to the low $20s CPM. The streaming platform has also lauded bespoke custom commercials and hinged its strategy on tentpole live events.
Next growth spurt
For all Netflix’s growth, there’s still the question of what comes next. The platform could become one of the primary NFL rights holders one day, own tentpole live events or create its own DSP.
As far as this season’s upfront negotiations go, Netflix has a leg up thanks to its ad business improvements.
“As much as I’m not about to say I think Netflix is going to win the upfront, because I think traditional TV still largely owns the upfront.” However, Peterson said, “Netflix is remaking — or is at least is part of a wave of companies remaking the nature of upfront deals.”
More in Podcasts
From The Brooklyn Nets to The Golden Girls, Digiday editors break down the state of ad agencies
On the Digiday Podcast, Digiday staffers break down the state of play among major agencies using sports analogies and The Golden Girls.
Here’s what OpenAI needs to do to reach its billion-dollar ad ambitions
OpenAI has billion-dollar goals for its ChatGPT ads by the end of this year. But can it woo advertisers enough to make good on those goals?
How Semafor is redefining the head of video role
As Semafor’s head of video, Adam Banicki sits at the intersection of the newsroom and the commercial team, reporting to the editor-in-chief with a dotted line to the revenue side.