Netflix’s entry into the advertising space has been one of the most disruptive shifts in the media landscape in recent years. What was once a premium, ad-free streaming platform has now positioned itself as a major player in the ad-supported video-on-demand (AVOD) and connected TV (CTV) markets. This shift introduces new opportunities for advertisers but also amplifies the already complex fragmentation of the CTV ecosystem. As Netflix continues to expand its advertising capabilities, including its move into live sports programming and the rollout of its proprietary ad tech, media buyers and planners must navigate an increasingly intricate and evolving environment.
The Changing CTV Landscape: Netflix’s Impact
CTV has long been a fragmented and challenging space for advertisers, with multiple streaming platforms offering varying ad products, targeting capabilities, and measurement methodologies. With Netflix now in the mix, this fragmentation is further exacerbated. Unlike traditional TV, where buyers could purchase inventory across a few dominant networks, CTV requires media buyers to piece together inventory across multiple walled gardens—including Netflix, Hulu, Disney+, YouTube, and more. Each of these platforms operates within its own ecosystem, offering different levels of data access, targeting precision, and measurement transparency.
Netflix’s ad-supported tier was introduced in late 2022, marking a significant departure from its historical positioning as a premium, subscription-only service. The company initially partnered with Microsoft to handle ad sales and technology but has since moved toward building its own in-house ad platform. This signals a long-term commitment to advertising as a core revenue driver and sets the stage for Netflix to compete with other major ad-supported streaming services. However, the walled-garden nature of Netflix’s ecosystem means that advertisers must adapt to yet another proprietary system, further complicating CTV planning and execution.
Live Sports and the Expansion of Netflix’s Ad Inventory
One of the most notable developments in Netflix’s advertising strategy is its move into live sports. Traditionally, live sports have been the last stronghold of linear TV, offering advertisers a rare opportunity to reach large, engaged audiences in real time. As Netflix begins integrating live sports programming—including events like the Jake Paul vs. Mike Tyson fight—the platform’s advertising opportunities expand significantly.
Live sports bring with them high engagement and appointment viewing, making them attractive for advertisers seeking premium inventory. However, Netflix’s approach to live sports advertising remains an open question. Will they offer traditional ad breaks, or will they experiment with more integrated advertising formats? The answers to these questions will shape how brands approach CTV media buys moving forward. Additionally, Netflix’s ability to measure and attribute ad performance in live environments will be critical in determining its viability as a competitor to traditional live sports broadcasters.
Netflix’s Proprietary Ad Tech and the Future of Targeting
A pivotal shift in Netflix’s advertising strategy is the development of its own in-house ad technology. By moving away from third-party ad sales and tech partnerships, Netflix aims to exert greater control over its ad inventory, audience data, and measurement capabilities. While this could lead to enhanced targeting options and a more refined ad experience for brands, it also presents new challenges.
One of the biggest concerns for advertisers is the continued lack of interoperability across CTV platforms. Unlike the programmatic display or search landscapes, where buyers can execute campaigns across multiple publishers within a unified buying ecosystem, CTV remains highly fragmented. Netflix’s decision to build its own ad tech stack rather than integrate with broader demand-side platforms (DSPs) means that advertisers will likely need to engage with yet another standalone buying interface. This further complicates the ability to manage frequency, optimize performance across platforms, and measure attribution effectively.
Moreover, Netflix has a significant advantage in its first-party data, given its deep insights into user viewing habits, content preferences, and engagement patterns. If Netflix chooses to leverage this data in its advertising products, it could offer some of the most advanced audience segmentation and targeting capabilities in the CTV space. However, data privacy concerns and regulatory pressures may limit how much of this data can be shared with advertisers.
The Fragmentation Challenge: What This Means for Media Buyers
For media buyers and planners, Netflix’s entry into the ad market is both an opportunity and a challenge. On the one hand, Netflix provides access to a massive, engaged audience that was previously untapped by advertisers. On the other, it introduces yet another layer of complexity in an already convoluted CTV ecosystem.
Key challenges include:
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Platform-Specific Buying Requirements: With Netflix operating its own ad tech stack, advertisers must navigate a separate buying process, adding operational inefficiencies.
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Limited Transparency and Measurement: Like other walled gardens, Netflix will likely restrict third-party measurement access, forcing advertisers to rely on platform-reported metrics.
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Frequency Management Issues: Without universal identifiers across platforms, controlling ad frequency across Netflix and other CTV providers remains a major pain point.
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Increased Costs for Premium Inventory: Netflix’s position as a premium streaming service means ad inventory may come at a premium cost, requiring careful budget allocation.
The Future of Netflix Advertising and CTV at Large
Looking ahead, Netflix’s advertising business is poised to grow, but its long-term success will depend on how well it balances the needs of advertisers with its commitment to maintaining a high-quality user experience. If Netflix can provide robust targeting, transparent measurement, and competitive pricing, it could become one of the most valuable players in the CTV advertising space. However, if it follows the path of other walled gardens—offering limited transparency and forcing advertisers to adopt a siloed buying approach—it may contribute more to the fragmentation problem than to its solution.
For media buyers, the key will be staying agile. As Netflix’s advertising platform evolves, brands and agencies must continuously reassess its value within their broader media mix. Whether Netflix becomes a must-buy inventory source or just another walled garden will depend largely on how it executes its ad strategy in the coming years. What’s clear is that CTV is not getting any simpler, and media planners must be prepared for an increasingly complex and fragmented landscape.
