Netflix to go independent with its own ad server

In a move that could reshape the streaming advertising landscape, Netflix announced it's building its ad technology platform. This comes just 18 months after the company launched its ad-supported tier.

Previously, Netflix relied on Microsoft's ad tech, allowing them to quickly enter the ad space and catch up with competitors like Hulu, which has had its own ad server for over a decade.

Now, with an in-house platform, Netflix has full control over its advertising future. This strategic shift empowers them to design targeted, personalized ad experiences for its massive 270 million subscriber base.

“Bringing our ad tech in-house will allow us to power the ads plan with the same level of excellence that’s made Netflix the leader in streaming technology today,” said Amy Reinhard, Netflix’s president of advertising. “We’re being incredibly strategic about how we present ads because we want our members to have a phenomenal experience. We conduct deep consumer research to make sure we stay ahead of the competition, bringing opportunities that are better for members and better for brands.”

While specifics are limited, Netflix is likely moving away from generic ads. The Financial Times reports the company is exploring "episodic" campaigns – a series of connected ads that tell a story, rather than repetitive messages.

The announcement was made during the company’s Upfronts presentation on Wednesday during which they also revealed plans to expand its buying capabilities this summer. The Trade Desk, Google's Display & Video 360, and Magnite will join Microsoft as programmatic partners. Interestingly, competitor Disney+ also partners with The Trade Desk.

Netflix also revealed that its ad-supported tier has been a major success currently boasting 40 million global monthly active users. It only had 5 million users in the first 6 months after launch.