Netflix Advertising: The Future of Streaming TV Ads and How to Use It for Marketing

Since its launch in November 2022, Netflix’s ad-supported subscription model has gained steady traction with viewers and marketers. What began as a cautious entry into advertising—anchored by a partnership with Microsoft—is now evolving into a fully controlled, in-house operation. More than half of new subscribers in markets with the ad tier now choose it over the ad-free option, signaling both audience acceptance and a growing pool of impressions for brands.

For marketers, Netflix offers something distinct in the crowded connected TV space: a limited ad load designed to protect viewing experience, consistently high completion rates thanks to non-skippable formats, and the prestige of appearing alongside globally recognised series and films. 

This article explores how Netflix advertising works, the types of formats available, the benefits and challenges of the channel, how to execute effective campaigns, and how AI Digital’s exclusive access can help brands make the most of this fast-developing opportunity.

What is Netflix advertising?

Netflix advertising is the streaming giant’s ad-supported subscription plan, launched in November 2022. It allows brands to run short, non-skippable video ads within Netflix programming—something that was off the table during its first 15 years as an ad-free, subscription-only platform.

The move marked a significant strategic shift. Netflix had built its reputation on uninterrupted viewing, but slowing subscriber growth and competitive pressure from ad-supported services like Hulu and Peacock created an opening. The result was a lower-priced tier that blends the platform’s hallmark content library with carefully limited ad breaks, giving advertisers a route into one of the most-watched streaming environments in the world.

eMarketer’s Jeremy Goldman pegs Netflix’s U.S. market share at 5.2%, with $1.67 billion in annual CTV ad revenue out of a $31.9 billion market. It’s still a small base, but the company is gaining ground as the entire segment grows (Source).

How Netflix advertising works

Netflix’s ad tier operates within a hybrid model—part subscription, part ad-supported video on demand. Advertisers can buy inventory directly or programmatically, with placements carefully limited to preserve the platform’s viewing experience. The first step in understanding the mechanics is looking at how the subscription is built.

The ad-supported subscription model

Netflix’s ad-supported plan offers a reduced monthly fee in exchange for a modest amount of advertising—about four to five minutes per hour of content, compared to the 12–16 minutes common on traditional TV. Ads appear before and during shows or films and are non-skippable.

For users, the trade-off is simple: lower cost for the same access to Netflix’s library, minus a handful of titles not yet cleared for ad-supported viewing. For advertisers, it’s a chance to reach viewers who are highly engaged, watching on the biggest screen in the house, and far less likely to multitask than when using mobile-first platforms.

This format aligns closely with the advertising video on demand (AVOD) model, where free or discounted content is supported by commercials. The difference is that Netflix’s ad tier is part of a subscription video on demand (SVOD) service, creating a hybrid model that combines subscription revenue with advertising income.

Netflix's advertising strategy

From the outset, Netflix kept the ad load intentionally light to protect viewing experience. It partnered with Microsoft’s ad tech division to manage sales and delivery in the first phase, ensuring a quick market entry without building its own platform from scratch.

In 2024 and 2025, the company began transitioning toward its own in-house ad technology. This gives Netflix full control over campaign targeting, measurement, and format development. Alongside direct sales, inventory is also available programmatically through platforms like The Trade Desk and Google’s DV360, widening access for agencies and advertisers.

In the Q2 2025 report, Netflix announced its Ads Suite is now live in all 12 ad markets, calling it “foundational” to its long-term strategy. The platform powers expanded programmatic buying, sharper targeting, stronger measurement, and more advanced ad formats.

The focus remains on premium positioning—strict brand-safety standards, curated targeting options, and an emphasis on high-impact creative rather than high-volume ad pods.

User ad experience

Netflix commercials run in standard TV-style slots of 15 or 30 seconds, with the vast majority placed as mid-roll breaks—about 86%—and the rest as pre-rolls. Each ad break contains only one or two spots, which helps reduce fatigue and keeps viewers from tuning out.

Completion rates are consistently high because ads cannot be skipped, and Netflix applies strict rules on placement to ensure they appear in natural content breaks. Children’s profiles are ad-free, sensitive categories are excluded, and creative must be approved before going live. 

The result is a viewing environment that feels closer to prestige television than to ad-heavy streaming platforms, preserving the binge-worthy nature of Netflix content while giving brands full-screen attention.

Types of Netflix ads

Netflix ad formats are designed to integrate into the viewing experience while giving brands prominent, uncluttered placement. Current offerings focus on short-form, high-impact video, with several new formats in development.

• Standard video ads: The core of Netflix advertising: 10, 15, or 30-second non-skippable spots placed before or during content.
• Content sponsorships: Brands can align with specific shows, movies, or events, gaining association with high-profile premieres or culturally significant releases.
• Pause ads (in testing, expected 2026): Static or lightly animated placements shown when a viewer pauses content.
• Interactive ads (planned for late 2025-early 2026): Basic user engagement features without leaving the Netflix environment.
• Live event ads: Available for sports and entertainment programming, such as NFL games and WWE Raw.

At its 2025 upfront, Netflix announced that pause ads and interactive mid-rolls—powered by generative AI—will roll out in 2026 across all ad-tier markets. Expect overlays, calls-to-action, and second-screen prompts that blend advertising into the worlds of its shows.

Benefits of Netflix advertising for marketers

Netflix’s ad tier gives brands access to a carefully curated audience in a setting that commands attention. With light ad loads, premium content, and a growing subscriber base, it offers several advantages that set it apart from most connected TV buys.

Massive audience reach

Netflix’s ad-supported tier now has 94 million monthly active users worldwide, with a significant share in the United States. In markets where the ad tier is available, more than half of new subscribers choose it. The U.S. audience skews younger than traditional TV—18–34-year-olds make up a larger proportion of viewers than on any cable network.

Gen Z still leans toward YouTube, but Netflix’s reach rivals TikTok (71.2%) and Snapchat (70.3%).

This scale offers advertisers a reach that rivals or surpasses many broadcast networks, but within an on-demand, highly engaged environment.

Advanced targeting capabilities

At present, Netflix offers core targeting options:

• Geography (DMA targeting is recommended for more reliable delivery than ZIP-level).
• Content genre (e.g., drama, comedy, documentary).
• Demographics (age and gender).

AI Digital’s access to Netflix inventory allows brands to apply these filters with transparent pricing adjustments: +10% for geo or genre targeting, +15% for age/gender. 

While the options are narrower than some connected TV platforms, Netflix’s in-house ad tech rollout is expected to enable more granular audience segments and potentially integrate external data sources for behavioral targeting.

High engagement and viewership

Netflix subscribers are highly active, with ad-tier users spending an average of 41 hours per month on the platform. Non-skippable ads and a low ad load contribute to completion rates that consistently outperform industry averages for connected TV.

Binge-watching also works in advertisers’ favor: repeat exposure to a campaign in a short time frame can strengthen recall and brand association, especially for upper-funnel objectives.

Premium content environment

Netflix’s catalogue is entirely professionally produced (no user-generated content) and heavily curated for brand safety. Strict creative approval processes and prohibited categories (e.g., political ads, CBD, tobacco, weapons) help ensure ads run in a context advertisers can trust.

The “halo effect” of appearing alongside Emmy-winning originals and cultural phenomena enhances perceived brand quality, especially for products and services aligned with entertainment, lifestyle, and aspirational messaging.

Challenges of Netflix advertising

Strong engagement and brand-safe content are Netflix’s strengths, yet some restrictions remain. Factoring them in helps marketers plan smarter.

Limited inventory for advertisers

While growing, the ad-supported tier still represents a minority of Netflix’s total global subscriber base. Limited ad minutes per hour further constrain total available impressions, and campaigns with overly narrow targeting (e.g., ZIP code) may face delivery challenges.

This scarcity can make Netflix a strong complement to, rather than a replacement for, broader connected TV or AVOD campaigns.

Privacy and data concerns

Netflix’s advertising is designed with strict privacy safeguards, meaning there’s no use of third-party cookies and minimal reliance on external data segments. For advertisers seeking highly personalized targeting, the current capabilities may feel restrictive. The benefit of this approach is greater control over ad quality and less risk of appearing in unsafe environments but at the expense of the precision some marketers expect from digital buys.

High CPM rates compared to other channels

Netflix advertising commands premium pricing that may challenge some advertiser budgets. Initial CPMs reportedly reached $50-65, though they have since decreased to approximately $30-60 depending on targeting.

Minimum spend requirements can exclude smaller advertisers from Netflix opportunities. Current minimums typically start at $18,000 for seven-day campaigns, creating barriers for businesses with limited advertising budgets.

Competitive pricing pressure from other CTV platforms affects Netflix's value proposition. Amazon Prime Video's entry into advertising with significantly larger scale and competitive pricing creates alternatives for budget-conscious advertisers.

How to advertise on Netflix

Below is a practical, step-by-step walkthrough for setting up campaigns in Netflix Ads Manager. 

1. Request access and create your account: Go to the Netflix Advertising site and request access. Once approved, you can log into Netflix Ad Manager to build campaigns.
2. Confirm eligibility and policy compliance: Before you upload creative, review Netflix’s ad guidelines and restricted categories. Netflix publishes ad-supported plan rules and points to a small set of titles that aren’t available on the ad tier due to licensing. If you operate in a restricted vertical, certification/approval is required before spend begins.
3. Set campaign objective, flights, and budget: Define your goal (typically awareness or consideration), set start/end dates, and choose a budget. Buying can be direct or via programmatic partners (The Trade Desk, Google DV360; Magnite on the supply side), with Netflix continuing to expand programmatic access. 

💡 Specialized agencies such as AI Digital, with exclusive access to Netflix inventory, can streamline and speed up the entire process.

4. Choose placements and formats: Select pre-roll and mid-roll video (10, 15, or 30 seconds). Netflix keeps total ad time to “a few short ads per hour” and places breaks at natural story beats. This is part of why completion and attention metrics test well on the platform. 
5. Set targeting: Apply geographic (country/DMA), content genre, and basic demographic filters. Netflix is rolling out its own ad tech to enable more flexible buying, improved measurement, and new tools for targeting over 2025.
6. Upload creative to spec: Follow Netflix’s Ad Creative Source Specification (file types, duration matching, audio/video requirements). Netflix notes a standard creative approval window (e.g., ~48 hours) and details for live, pre-roll, and mid-roll units.
7. Measurement and verification: Enable third-party measurement/verification where available. Netflix has named partners across attention, viewability, and outcomes—Nielsen, iSpot, DoubleVerify, Integral Ad Science, Kantar, EDO, Lucid, NCSolutions, TVision—so brands can validate delivery and impact.‍
8. Launch, monitor, and optimize: Go live, monitor pacing and reach, then adjust targeting, frequency, and creative rotation. Netflix’s push to in-house ad tech is meant to provide more control, faster tooling updates, and broader programmatic access.

How to leverage Netflix advertising in your campaigns

Once you’ve secured access to Netflix inventory, the next step is making sure your creative and media strategy work within the platform’s unique parameters. From aligning messaging with viewing habits to integrating Netflix into a broader connected TV plan, execution is key to getting the best results.

Creating effective adverts on Netflix for the right audience

Netflix's audience expects high-quality content, making creative excellence essential for advertising success. Your video creative should match the production values viewers associate with Netflix programming. 

Storytelling approaches work particularly well on Netflix. Rather than hard-sell tactics, focus on narrative-driven creative that engages viewers emotionally. The platform's engaged audience responds positively to ads that feel like entertainment rather than interruptions.

Context alignment improves performance significantly. Consider the content genres your target audience watches and create advertising that complements rather than conflicts with viewing moods and expectations.

Here’s the takeaway, with more practical suggestions:

• Lead with story, land one message. Keep the creative crafted for 15–30 seconds, with brand cues early and a single takeaway. Mid-roll is the dominant placement; write to a cold open and a clean button.
• Design for the living-room screen. Most ad viewing happens on TV devices, so prioritize clear framing, legible supers, and sound that passes broadcast-style loudness checks. Netflix documents technical best practices for audio/video delivery.‍
• Respect the light ad load. Your ad will share the break with very few other spots; use that attention thoughtfully rather than cramming multiple CTAs. Netflix’s own guidance emphasizes natural break placement and short ad pods.

Integrating Netflix advertising with other platforms

Coordinating Netflix campaigns with other channels ensures reach is amplified rather than duplicated. The goal is to make Netflix the high-impact centerpiece while using complementary platforms to extend frequency and coverage:

• Plan Netflix as a premium reach pillar, then extend. Combine Netflix with broader CTV buys (Hulu/Disney, Peacock, Max) and YouTube on TV for incremental reach. Use programmatic access via The Trade Desk or DV360 to coordinate frequency and audiences across channels. 
• Leverage programmatic private marketplaces. As Netflix expands DSP/SSP connectivity, fold Netflix deals into your existing buying workflow and unify frequency management across your video stack.‍
• Use content moments and live events. Live sports and tentpole premieres deliver appointment viewing; align flighting and creative to those windows for outsized impact.

Measuring performance and ROI

Accurate measurement on Netflix starts with understanding the metrics the platform and its partners can provide. While some are similar to other CTV channels, others reflect Netflix’s unique viewing model and limited ad load:

• Match KPIs to the medium. With premium CPMs and light ad load, prioritize reach, on-target reach, attention, ad recall, and brand lift as primary KPIs; add outcome proxies (search lift, site visits, incremental sales) where partner support exists.
• Turn on third-party verification. Use Nielsen/iSpot for reach and incrementality, DoubleVerify/IAS for quality, Kantar/Lucid for brand lift, and EDO/NCSolutions/TVision for outcome and attention diagnostics, as available.  ‍
• Iterate with platform upgrades. Netflix’s in-house ad tech initiative is intended to improve buying flexibility, targeting options, and measurement access—plan for quarterly optimization sprints as new capabilities land.

AI Digital’s offering for Netflix advertising

AI Digital provides agencies and brands with exclusive programmatic access to Netflix’s U.S. and Canada OTT inventory, giving marketers a direct route into one of the most sought-after premium streaming environments. This access includes all core Netflix targeting parameters—geography, content genre, and basic demographics—applied through programmatic buying for flexible campaign management.

Targeting works on transparent, incremental pricing: +10% for geo or genre filters, and +15% for age/gender. 

👉 For example, a campaign targeting 25–34-year-old comedy viewers in specific DMAs can be built and priced with complete clarity, making planning and budgeting straightforward.

Buying through AI Digital means campaigns can run either:

• Programmatically via leading DSPs such as The Trade Desk or DV360, enabling integration into an existing cross-platform video plan.‍
• Direct through Netflix’s insertion order process, for advertisers seeking guaranteed placement and maximum inventory control.

To maximize effectiveness, AI Digital recommends:

1. Leverage Netflix’s brand-safe environment to position premium or aspirational products. The halo effect of Emmy-winning originals and blockbuster films can boost brand perception.
2. Align creative to binge-viewing habits—plan for consistent branding and short, memorable messages that hold up across multiple exposures in a single session.
3. Use programmatic frequency management to coordinate with other CTV channels and avoid overexposure.
4. Tap into Netflix’s measurement partnerships (Nielsen, DoubleVerify, iSpot, etc.) to validate reach, viewability, and brand lift.

With the combination of exclusive supply, curated targeting, and programmatic flexibility, we enable advertisers to reach Netflix viewers with precision without sacrificing the scale and attention that make the platform so valuable in a premium streaming mix. If you’re ready to give it a try, reach out and we’ll schedule a demo call to explore how we can help you get started.

The future of Netflix advertising

Netflix’s ad business has moved from cautious test to strategic priority, with the potential to redefine streaming advertising. Rising consumer price sensitivity, growing demand for premium video inventory, and Netflix’s investment in ad tech are fueling growth. Ahead, the company is adding infrastructure, live sports, and interactive ad formats—positioning it to capture a bigger slice of budgets moving from linear TV to CTV.

Growth in ad-supported subscriptions

Netflix’s ad-supported tier is on a steep growth curve. In available markets, over half of new sign-ups now choose the ad tier, fueling rapid audience expansion. The momentum is backed by revenue gains—ad revenue doubled in 2024 and is expected to double again in 2025, with some forecasts reaching $3 billion globally that year. Longer term, industry projections put Netflix’s annual ad revenue at $9 billion by 2028–2029, cementing advertising as a core revenue stream alongside subscriptions.

The role of AI and data analytics in Netflix ads

Netflix is building advanced AI to boost ad effectiveness and viewer experience:

• Machine learning will refine placement, frequency, and creative selection based on individual viewing patterns. 
• Generative AI will enable personalized ad variations, adapting messaging, visuals, and offers to each viewer and context. 
• Predictive analytics will sharpen campaign planning by revealing optimal timing, content adjacency, and audience segments.  

💡Learn more about AI-powered advertising optimization through Smart Supply. It connects you directly to high-performing inventory, cuts out cost inflation, and uses AI to remove low-value placements—helping your Netflix campaigns run smarter, scale faster, and hit KPIs with less waste.

Competition with other CTV platforms (Hulu, Disney+, Amazon Prime)

Connected TV advertising is consolidating around a handful of major players, with Netflix competing as a premium option in a crowded market. Amazon Prime Video’s move to include ads for all subscribers created instant scale that challenges Netflix’s reach. Differentiation will be critical—Netflix’s strengths in content quality, brand safety, and user experience give it an edge over platforms competing on price or scale. Continued investment in interactive formats, pause ads, and advanced targeting will be key to holding that advantage.

Conclusion: Why Netflix’s ad business matters for your brand

In just a few years, Netflix has evolved from a subscription-only streaming service to one of the most valuable premium ad platforms in connected TV. For marketers, it offers a rare mix: high engagement, brand-safe programming, and a younger, harder-to-reach audience than traditional TV.

The advantages are clear: quality inventory, growing reach, and association with some of the most talked-about content in entertainment. The challenges are equally important to factor in: limited inventory, premium pricing, and a still-developing targeting toolkit.

Brands that treat Netflix as a strategic awareness channel and pair it with broader CTV campaigns are best positioned to get value from its audience. 

Partnering with AI Digital opens the door to Netflix inventory, advanced programmatic targeting, and robust measurement tools, helping you run smarter, more effective campaigns with less hassle. Get in touch with us at AI Digital, and we’ll walk you through how we can put these capabilities to work for your brand.