Reflecting on the Future Ad Strategy for Netflix

Back in 2019, I wrote an article about Netflix's upcoming move toward an ad-supported tier . Since then, enough time has passed to reflect on their approach and consider potential directions for their ad platform. Here, I’ll outline insights into what Netflix is doing—or perhaps should be doing—from my perspective.

Strategic Foundation

To start, let’s examine the key distinctions between Netflix and traditional linear TV (whether broadcast or FAST):

I. Content as a Competitive Edge

Netflix’s journey from a DVD rental service to a streaming platform has been marked by heavy investments in original content. This strategy not only differentiates Netflix’s offerings but also reduces reliance on external studios, solidifying its competitive position.

II. Personalization as a Priority

Netflix delivers seamless streaming across a range of devices, consistently providing high-quality viewing. Advanced algorithms power personalized content recommendations, enhancing user engagement.

III. A Global Approach at Scale

By tailoring content to regional preferences and creating local-language originals, Netflix has successfully expanded its global footprint, engaging diverse audiences and strengthening its international presence.

Whatever ad strategy Netflix pursues should be rooted in these three foundational elements. Now, let’s examine the characteristics of linear ad inventory and its implications for Netflix's ad strategy.

Linear and FAST Ad Inventory

Characteristics of Broadcast TV Inventory:

1. Fixed Ad Slots: Linear TV advertising operates on a pre-set schedule with fixed ad slots, which advertisers must book in advance. There is no individual targeting per viewer.
2. Mass Audience Reach: Linear ads are broadcast simultaneously to a broad audience, making it a suitable option for brands aiming to achieve high reach and visibility across varied demographics.
3. Basic Targeting Capabilities: Linear TV offers basic demographic targeting based on channel, program, and time slot.

The key differentiators between traditional broadcast TV and FAST (Free Ad-Supported Streaming TV) advertising lie in data usage, Dynamic Ad Insertion (DAI), and cross-device reach:

• Data Utilization: FAST services gather data on viewer behavior, demographics, location, and sometimes device usage, enabling targeted ads that are more relevant compared to the broad approach of traditional TV.
• Dynamic Ad Insertion: FAST platforms can dynamically insert ads in real time for each viewer, offering a highly individualized ad experience.
• Cross-Device Reach: FAST enables advertisers to target viewers across multiple devices within a single campaign, allowing for retargeting or ad sequencing that aligns with a user’s viewing journey.

Rethinking Dayparts

Traditionally, dayparts are used in TV advertising to assign CPM rates based on peak viewing times, such as evening primetime slots when audiences are largest. In an AVOD (Ad-Supported Video on Demand) environment, however, viewership density is driven by content popularity rather than time of day.

Content Popularity is the New Daypart

To bridge traditional TV characteristics with Netflix’s content-driven approach, we can redefine "dayparts" by content popularity rather than time-based viewing.

• Popularity-Based CPM: With Netflix, CPMs could be assigned based on a show’s popularity and engagement metrics rather than viewing times. High-demand titles with consistent viewership can act as the new “primetime,” allowing Netflix to assign premium CPMs to content that resonates with audiences. This strategy leverages Netflix’s extensive catalog of original programming, making popular titles highly valuable ad spaces whenever they’re watched.

Importance of Third-Party Measurement with Nielsen

Netflix’s multiyear agreement with Nielsen highlights the value of third-party measurement in validating content popularity. This partnership not only emphasizes Netflix’s commitment to transparency but also reassures advertisers that popularity-based CPMs are grounded in reliable, industry-standard data.

Contextualizing Ads by Time of Day and Device

Netflix could redefine “primetime” using contextual viewing data—focusing on when, how, and on which devices users consume content, rather than rigid time slots.

Morning, Day, and Evening Contexts

• Morning Context: During morning commutes or pre-work routines, users often engage with mobile devices in short bursts. Netflix could prioritize light-hearted, shorter-form content during this time, with ads that align with a “start your day” theme. Quick, energizing ads that fit mobile experiences would be particularly effective.
• Day Context: Midday viewing, often during breaks or lunch hours, might mix mobile and desktop usage. Ads can capitalize on these shorter viewing windows by aligning with snackable content, presenting informative or educational ads that match viewers' productive or exploratory mindset.
• Evening Context: In the evening, when users are on larger screens and ready for immersive content, Netflix could offer premium ad slots around high-engagement content like dramas or documentaries. This aligns with the viewer’s relaxed, focused state, making it ideal for longer, high-production ads designed to tell a story.

To enhance this context-based strategy, Netflix could use cross-device contextualization. By tracking how users shift from mobile to larger screens, Netflix can deploy adaptive ads that follow viewers across devices, creating sequential ad narratives that enrich engagement.

Benefits for Advertisers

This flexible, user-centric model allows Netflix to redefine “primetime” based on behavior patterns rather than time constraints. Advertisers can align campaigns with viewers’ actual viewing contexts, making ads more relevant and memorable across devices.

To be continued.

P.S.

After I finished this piece, someone brought this Digiday article to my attention, and there's an interesting factoid there:

Netflix’s plan took a turn— shifting from how ads are sold, to how they’re bought. It’s a subtle shift but one that’s driving Netflix’s increasing obsession with ad tech. And like all obsessions, this one has led Netflix to make some bold — and possibly questionable — moves. The most glaring example? Ditching the Microsoft ad server that helped kickstart its programmatic business two years ago in favor of launching its own platform worldwide by the end of next year. For companies with established programmatic businesses, this is a tough sell, let alone for a newcomer like Netflix. The only reason Netflix might be making this risky move is that if it can’t offer marketers a huge audience, it can promise serious impact.

I believe this proves my point that whatever Netflix is reinventing with their in-house advertising stack, it is definitely based around content. Stay tuned, in my next piece we might explore a completely different company that is striving to disrupt the advertising media space. I'll give you a hint -- they are taking on Meta and Reddit combined. Or I'll share some more thoughts on Netflix. Let me know in the comments which one you would prefer.

About the Author

Sergey is the CEO of Geomotiv and CTO of ElementalTV , with deep expertise in advertising technology and media. Known for his analytical approach, Sergey specializes in reverse-engineering strategies from traditional and digital media to create practical, data-driven solutions. His work focuses on leveraging technology and data to transform ad experiences across streaming and emerging media platforms, enhancing both audience engagement and advertiser effectiveness.