Netflix Accelerates Ad Strategy for 2025
Netflix is accelerating its advertising strategy for 2025
Netflix is accelerating its 2025 advertising strategy as it enters the streaming advertising industry’s competitive landscape. With 40 million monthly active users globally now interacting with the ad-supported tier, the platform has seen a 70 percent year-over-year increase in users. The company has formed new alliances with industry leaders OpenAP and EDO, signaling a strategic shift toward diversified advertising revenue, premium brand placements, and data-driven measurement. This enables Netflix to compete directly with platforms like Hulu and Disney+ in the high-value streaming advertising segment.
Key takeaways
- Netflix’s ad-supported tier has reached 40 million monthly active users globally, reflecting 70 percent year-over-year growth.
- New partnerships with OpenAP and EDO aim to enhance ad targeting and improve ad effectiveness.
- The 2025 initial event demonstrated Netflix’s ambition to become a top-tier platform for premium video advertising.
- The company is shifting from a subscription-only model to a hybrid strategy that includes advertising.
Read also: Netflix pulls AI-powered poster for the movie Arcane
Evolution of Netflix’s advertising strategy
Netflix has entered the ad-supported streaming space cautiously. Best known for its ad-free model, the company introduced its first ad-supported tier in November 2022. Early skepticism about brand erosion or user alienation has been countered by steady adoption rates and improving engagement metrics.
Initially, Netflix partnered with Microsoft to create its own advertising infrastructure. By mid-2023, the company began testing new ad formats and enhancing programmatic capabilities. The 2025 introduction confirms that advertising is now a permanent component of Netflix’s business strategy, supported by investment in advertiser tools and measurement features.
Netflix 2025 Upfront: Metrics and Momentum
During its 2025 presentation, Netflix revealed that its ad-supported tier had grown to 40 million monthly active users globally, up from 23 million the previous year. This 70 percent increase positions Netflix among the leading ad-based video on demand (AVOD) platforms in the market.
Nielsen data shows that 85 percent of these users watch TV screens. This supports the platform’s appeal for long-form, high-impact video ads. Users in the ad-supported tier enjoy an average of over 20 hours of monthly viewing, reflecting strong engagement.
Netflix will also integrate OpenAP’s cross-platform unified measurement and EDO’s results-driven analytics. These tools aim to help advertisers plan campaigns using transparent data and measure ad impact more effectively.
Read also: How does artificial intelligence choose the ads you see?
How Netflix compares: Hulu, Disney+, and Max
Netflix’s rapid expansion into ad-supported streaming places it alongside Hulu, Disney+ and Max. The table below compares these platforms using key advertising metrics:
| platform | Ad-supported monthly users | Starting price (USD) | Average CPM | Basic ad format |
|---|---|---|---|---|
| Netflix | 40 m | $6.99 | $45-$55 | Pre-roll and during-roll video |
| Holo | 53 AD | $7.99 | $25-$35 | Presentation, interactive, video |
| Disney+ | 27 AD | $7.99 | $35-$50 | video |
| Top | 19 AD | $9.99 | $30-$45 | Pre-operation and care |
Hulu continues to lead in ad-supported users. However, Netflix requires a higher CPM due to brand safety, high engagement, and proximity to premium content. This pricing advantage reflects advertisers’ confidence and the platform’s ability to deliver uninterrupted cinematic experiences to viewers.
Benefits for advertisers: data, safety and impact
Netflix makes a compelling value proposition to advertisers for several reasons:
- Targeting accuracy: Partnerships with OpenAP and EDO support cross-platform audience segmentation and unified buying demographics.
- Brand integrity: Netflix regulates all of its content and does not host user-generated material, providing advertisers with a safe and controlled environment.
- Ad formats: The platform limits ad frequency to avoid viewer fatigue. New formats in development include pausing ads and sponsoring content.
- Attribution metrics: EDO Analytics provides advertisers with quantifiable data on campaign optimization, including brand perception and purchase intent.
Large corporations and mid-sized brands are adopting Netflix as part of their video strategies due to its balance of reach, control, and audience quality.
Read also: How realistic is Disney’s “smart home” now?
Predicting the future: Where Netflix fits into the growth of streaming advertising
Streaming advertising revenues are poised for continued expansion. Insider Intelligence predicts that ad-supported video streaming revenues in the United States will grow from $22 billion in 2024 to more than $31 billion in 2026.
According to GroupM, global streaming platforms will account for more than 17 percent of video ad spending by 2025. As part of this growth, Netflix is expanding its ad inventory and international publishing plans are strengthening its importance for multi-channel campaigns.
The hybrid model provides a buffer against subscriber volatility and pricing concerns. By offering a lower-cost option to users with limited advertising, Netflix is expanding its market presence while monetizing those users through advertising.
User reception and ease of use of the platform
User response to the ad-supported plan has been largely favorable. Netflix reported lower than expected declines and high satisfaction scores. Viewers highlight its strong streaming quality, light ad load, and simple design as key advantages.
While some analysts predicted that advertising would alienate users, usage trends indicate that many subscribers are willing to accept ads in exchange for saving subscriptions. This reflects a broader consumer shift towards AVOD services across the industry.
Timeline: Netflix’s advertising strategy from launch to 2025
| year | turn |
|---|---|
| 2022 | Offers the ad-supported tier with Microsoft as an advertising technology partner |
| 2023 | Start testing mid-roll ad formats and adjust international pricing strategies |
| Late 2023 | Expands programmatic capabilities and signs major advertising deals for brands |
| 2024 | Reach 23 million users across the board and experience innovative ad formats |
| Early 2025 | Announces partnerships with OpenAP and EDO in advance; Up to 40 million users |
FAQ: What advertisers and users want to know
How many users will subscribe to Netflix’s ad-supported plan in 2025?
40 million monthly active users globally.
What makes Netflix’s advertising strategy competitive?
Strong viewer engagement, premium content, advanced targeting tools via OpenAP, results tracking with EDO, and brand-safe ad inventory.
How does Netflix compare to Hulu or Disney+?
Hulu has a larger ad-supported user base, but Netflix achieves higher CPMs and offers more control over the viewing environment, attracting brands looking for premium placements.
Is the ad-supported tier profitable?
Netflix has not released detailed profit metrics but they point to growing advertiser demand, strong user growth and high engagement indicating improving margins.
References
- Diversity: Netflix Advertising Level Growth Report
- Brynjolfsson, Erik, and Andrew McAfee. The Second Machine Age: Work, Progress, and Prosperity in a Time of Great Technologies. W. W. Norton & Company, 2016.
- Marcus, Gary, and Ernest Davis. Rebooting AI: Building AI we can trust. Vintage, 2019.
- Russell, Stuart. Human consensus: Artificial intelligence and the problem of control. Viking, 2019.
- Webb, Amy. The Big Nine: How Tech Giants and Their Thinking Machines Could Distort Humanity. Public Affairs, 2019.
- Crevier, Daniel. Artificial Intelligence: The Troubled History of the Search for Artificial Intelligence. Basic Books, 1993.
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2025-05-16 18:01:00
