Netflix is upping its advertising game, announcing that it will introduce interactive mid-roll and pause ads, powered by generative AI, starting in 2026.
Though the move shows the streaming giant's commitment to its ad-supported tier, which has seen plenty of growth since its November 2022 launch, it's going to raise eyebrows from the AI-averse. Netflix's ad-funded tier now boasts 94 million subscribers, half of all new sign-ups.
Amy Reinhard, Netflix’s president of advertising, emphasised the platform's strong ad engagement, as reported by Media Play News, stating that subscribers pay as much attention to mid-roll ads as to the content itself – which feels a bit far-fetched.
The new AI-driven formats aim to enhance this further by blending advertisements with the look and feel of shows and movies. Pause ads, and the halfway advert will be tailored to whatever you're currently watching, appropriating the vibe. Given the recent Black Mirror episode Common People, one of Netflix's own shows, this move feels even more on the nose.
Adverts, AI adverts and more adverts
According to Netflix, this move promises more contextually relevant and interactive ad experiences. It offers advertisers flexibility and the potential to reach a huge audience. Netflix's in-house advertising platform, launched in the US in April and planned for global expansion by June, will underpin these efforts.
The streaming giant has goals to double its advertising revenue in 2025, signalling a long-term commitment to this revenue stream. Netflix's foray into advanced ad technology mirrors broader trends in the streaming world, with rivals like Amazon exploring new ad formats. However, Netflix's focus on generative AI to create immersive and personalised experiences sets it apart... for now.
While the potential for increased ad revenue and advertiser engagement is significant, the key will be balancing these ambitions with the expectations of its subscribers, who have long valued the platform's ad-free option, hopefully keeping in mind the social and environmental implications of using AI adverts – it's hard to imagine Don Draper going for it.
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