Netflix Accelerates Ad Strategy for 2025
Netflix is accelerating its ad strategy for 2025 as it firmly enters the competitive landscape of the streaming advertising industry. With 40 million global monthly active users now engaging with its ad-supported tier, the platform has experienced 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 ad revenue, premium brand placements, and data-driven measurement. This positions Netflix to directly compete with platforms like Hulu and Disney+ in the high-value streaming ad segment.
Key Takeaways
- Netflix’s ad-supported tier has reached 40 million global monthly active users, reflecting 70 percent year-over-year growth.
- New partnerships with OpenAP and EDO aim to enhance ad targeting and improve ad effectiveness.
- The 2025 upfront 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.
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Table of contents
- Netflix Accelerates Ad Strategy for 2025
- Key Takeaways
- The Evolution of Netflix’s Ad Strategy
- Netflix 2025 Upfront: Metrics and Momentum
- How Netflix Compares: Hulu, Disney+, and Max
- Benefits for Advertisers: Data, Safety, Impact
- Forecasting the Future: Where Netflix Fits in Streaming Ad Growth
- User Reception and Platform Usability
- Timeline: Netflix’s Ad Strategy From Launch to 2025
- FAQs: What Advertisers and Users Want to Know
- References
The Evolution of Netflix’s Ad Strategy
Netflix entered the ad-supported streaming space with caution. Known for its ad-free model, the company introduced its first ad-supported tier in November 2022. Early skepticism regarding brand erosion or user alienation has been countered by steady adoption rates and improving engagement metrics.
Initially, Netflix partnered with Microsoft to build out its advertising infrastructure. By mid-2023, the company began testing new ad formats and enhancing programmatic capabilities. The 2025 upfront 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 upfront presentation, Netflix revealed that the ad-supported tier has grown to 40 million monthly active users globally, up from 23 million the previous year. This 70 percent increase positions Netflix among the leading advertising-based video-on-demand (AVOD) platforms in the market.
Nielsen data shows that 85 percent of these users watch on TV screens. This supports the platform’s appeal for long-form, high-impact video advertising. Users on the ad-supported tier average over 20 hours of monthly viewing, reflecting strong engagement.
Netflix will also incorporate OpenAP’s standardized cross-platform measurement and EDO’s outcome-based analytics. These tools are intended to help advertisers plan campaigns using transparent data and to measure ad impact more effectively.
Also Read: How Artificial Intelligence Chooses 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 | Primary Ad Format |
|---|---|---|---|---|
| Netflix | 40M | $6.99 | $45–$55 | Pre-roll, mid-roll video |
| Hulu | 53M | $7.99 | $25–$35 | Display, interactive, video |
| Disney+ | 27M | $7.99 | $35–$50 | Video |
| Max | 19M | $9.99 | $30–$45 | Pre-roll, sponsorship |
Hulu continues to lead in the number of ad-supported users. Still, Netflix commands higher CPMs due to brand safety, high engagement, and adjacency to premium content. This pricing advantage reflects advertiser trust and the platform’s ability to offer uninterrupted and cinematic viewer experiences.
Benefits for Advertisers: Data, Safety, Impact
Netflix offers a compelling value proposition for advertisers for several reasons:
- Targeting Precision: Partnerships with OpenAP and EDO support cross-platform audience segmentation and standardized demographic buying.
- Brand Safety: Netflix curates all of its content and does not host user-generated material, offering advertisers a secure and controlled environment.
- Ad Formats: The platform limits ad frequency to avoid viewer fatigue. New formats in development include pause ads and content sponsorships.
- Attribution Metrics: EDO’s analytics give advertisers measurable data on campaign lift, including brand perception and purchase intent.
Top-tier companies and mid-sized brands are adopting Netflix as part of their video strategies due to its balance of reach, control, and audience quality.
Also Read: How Realistic is Disney’s “Smart House” Now?
Forecasting the Future: Where Netflix Fits in Streaming Ad Growth
Streaming ad revenue is poised for continued expansion. Insider Intelligence projects that ad-supported video streaming revenue in the US will grow from $22 billion in 2024 to over $31 billion in 2026.
According to GroupM, global streaming platforms will account for more than 17 percent of video ad spend by 2025. Within this growth, Netflix’s expanding ad inventory and international rollout plans enhance its relevance for omnichannel campaigns.
The hybrid model provides a buffer against subscriber churn and pricing concerns. By offering users a lower-cost option with limited ads, Netflix expands its market footprint while monetizing those users through advertising.
User Reception and Platform Usability
User response to the ad-supported plan has been largely favorable. Netflix reports lower-than-expected churn and high satisfaction scores. Viewers highlight strong streaming quality, a light ad load, and simple design as key benefits.
While some analysts predicted that advertising would alienate users, usage trends suggest that many subscribers are willing to accept ads in exchange for subscription savings. This reflects a wider consumer shift toward AVOD services across the industry.
Timeline: Netflix’s Ad Strategy From Launch to 2025
| Year | Milestone |
|---|---|
| 2022 | Introduces ad-supported tier with Microsoft as ad tech partner |
| 2023 | Begins testing mid-roll ad formats and adjusts international pricing strategies |
| Late 2023 | Expands programmatic capabilities and signs major brand advertising deals |
| 2024 | Reaches 23 million users on the ad tier and pilots innovative ad formats |
| Early 2025 | Announces partnerships with OpenAP and EDO at upfront; reaches 40 million users |
FAQs: What Advertisers and Users Want to Know
How many users are on Netflix’s ad-supported plan in 2025?
40 million global monthly active users.
What makes Netflix’s ad strategy competitive?
Strong viewer engagement, premium content adjacency, advanced targeting tools via OpenAP, outcome 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 earns higher CPMs and offers more control over the viewer environment, attracting brands seeking premium placements.
Is the ad-supported tier profitable?
Netflix has not released detailed profit metrics but reports growing advertiser demand, strong user growth, and high engagement that suggest improving margins.
References
- Variety: Netflix Ad Tier Growth Report
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