Dive Brief:
- Netflix is expanding ad-targeting capabilities available through partnerships with Amazon and Yahoo’s demand-side platforms, per an announcement.
- Beginning in Q2, U.S. advertisers will be able to tap into Amazon Audiences data based on trillions of first-party shopping, streaming and browsing signals. Buyers will also be able to leverage deterministic Yahoo DSP audiences built around interest, behavioral, purchase and life-stage data.
- At the same time, Netflix is introducing a Conversion API tool for tracking campaign outcomes. These moves show Netflix trying to round out its full-funnel marketing prowess while enriching advertising precision ahead of the key upfronts season.
Dive Insight:
Netflix continues to shore up its ad-tech offerings, which it calls the Ads Suite, through partnerships with leading players in the category that have more historic industry know-how and a deeper trove of data signals to draw on. The end goal is to make Netflix ad buying more streamlined and effective following the sometimes bumpy early days of the business, which launched in late 2022 and was initially supported by a sales and tech tie-up with Microsoft.
Beefing up the Ads Suite in Q2 aligns with the kickoff of the upfronts season, an occasion for brokering large TV advertising commitments where Netflix will likely have a significant presence. Netflix has made ad-tech sophistication a focus of its overtures to brands and agencies since introducing its in-house unit last year.
The streamer’s further cozying up with Amazon speaks to the immense value of the e-commerce giant’s data for boosting connected TV advertising performance. Amazon has established a booming retail media business on the back of its first-party data, and has tied Prime Video — a Netflix competitor — more deeply into that ecosystem in the quest for full-funnel marketing dominance.
Netflix first partnered with Amazon last September, allowing programmatic inventory to be purchased through Amazon’s DSP and effectively broadening its advertiser base. In the months ahead, Netflix buyers in the U.S. will also get the benefit of improved ad-targeting precision via Amazon Audiences, as well as Yahoo DSP audiences.
To show these features are driving outcomes, Netflix is rolling out its Conversion API, which will apply real-time insights for ads optimization. The company piloted the technology with the performance marketing agency Tinuiti earlier this year and saw campaigns for financial services, education technology and retail clients beat benchmarks by 75%, the announcement said.
Netflix generated over $1.5 billion in ad revenue last year, more than doubling its 2024 haul, and is on track to achieve a similar rate of growth in 2026, the company has said. Its ad-supported offerings reach about 190 million monthly active viewers, an internal metric. Netflix previously attempted to acquire Warner Bros., a mega-deal that would’ve potentially enriched its ads business, but walked away from those talks late last month due to a rival bid from Paramount Skydance.
