Netflix’s promoting enterprise definitively took flight within the first half of 2025. However regardless of shopper demand, consumers say a scarcity of measurement choices and shallow hyperlinks with key business companions stand in the way in which of additional funding.
The streamer’s second-quarter outcomes, launched July 17, confirmed a 16 p.c enhance in income. Together with each subscriber and promoting revenue, its quarterly income was $11.1 billion. The corporate’s advert tech stack is operational within the 12 nations it gives promoting, and it’s doubled advert income because the second quarter of final yr, in keeping with chief monetary officer Spencer Neumann. He didn’t provide a extra detailed breakdown of the agency’s revenue, although.
A cynical ear may detect a observe of disappointment in that lack of element. If that sounds pessimistic, think about the actual fact Netflix’s share value fell within the after-hours buying and selling following its earnings name. Each shareholders and the platform’s executives would love advert revenues to rise farther and quicker.
The platform has 94 million month-to-month energetic subscribers to its ad-supported tier (as of Could), and a latest Madison & Wall estimate steered its international advert revenues may attain $3 billion this yr, equal to roughly seven p.c of its annual income. However in keeping with the Wall Avenue Journal, it’s internally forecasting that to rise to $9 billion within the subsequent 5 years.
The excellent news, in keeping with a number of media consumers at holding corporations and enormous independents, a few of whom spoke to Digiday anonymously with a purpose to protect their relationships with the streamer, is that Netlix now has a major foothold on shopper media plans — one which’s prone to develop as soon as the mud has lastly settled on upfronts season.
“Netflix is manner up,” stated Eric Dunefsky, head of nationwide funding at Crossmedia.
Reflecting on the ultimate days and weeks of this yr’s drawn-out tv upfronts, PMG’s head of rising providers Natalee Geldert beforehand instructed Digiday that extra advertisers have been diverting TV budgets into ad-supported streaming, and that Netflix was a standout winner of that shift.
“They’re gaining traction shortly,” she stated. All of which factors to Netflix sustaining its present double-digit income progress over coming months.
eMarketer analyst Jeremy Goldman estimated that Netflix presently enjoys a 5.2% market share within the U.S.; eMarketer estimates its present CTV advert revenues at $1.67 billion a yr, out of a $31.9 billion CTV advert market. However the firm is rising from a small base and is gaining on its friends, at the same time as the general section expands. Video on demand advert spend within the U.Ok., for instance, grew 26% to £1.33bn ($1.77 billion) final yr, in keeping with Ofcom.
“[Netflix] is rising as a proportion of general video advert spending,” Goldman stated.
One holdco media purchaser, who exchanged candor for anonymity, instructed Digiday the platform was now amongst their high 5 CTV companions for advert spend. Shopper funding had doubled within the final yr (they didn’t present actual figures) pushed by an growth of its reside programming, continued funding in its premium programming and Netflix’s determination to speak in confidence to extra DSPs. The latter is an ongoing focus for the streamer, which permits manufacturers to speculate programmatic price range by way of DSPs operated by Microsoft, The Commerce Desk, DV360 and as of June, Yahoo.
Common CPMs (value per thousand) hover at $30, representing a way more “aggressive” value level than when Netflix first arrange its stall on the finish of 2022 (although streaming costs are usually increased than these of linear). “They’re priced extra successfully than they’ve been. It’s created the runway for all these partnerships,” the client added.
For the second purchaser, who additionally requested for anonymity, the streamer’s strikes to amass WWE and NFL rights in recent times have drawn in shoppers, they stated, whereas its maturing programmatic capabilities would doubtless pull in additional spending over the remainder of the yr.
A 3rd holdco company govt instructed Digiday its premium content material slate had confirmed magnetic for shopper {dollars}. “Their distinctive content material properties contribute to shoppers ensuring that they’re spending with Netflix. Their sponsorships and their integrations with explicit properties are coveted,” they stated.
The unhealthy information? Some shoppers are ready to see how Netflix’s in-house advert tech stack, its measurement capabilities and its partnerships with the broader advert business pan out earlier than dedicating extra {dollars}.
“They nonetheless aren’t the place the most important streaming companions are when it comes to the measurement capabilities that they’ve. That’s one thing that they’re engaged on, and so they’ve made plenty of guarantees, however I wish to see that come to fruition,” stated the second purchaser.
Multi-touch attribution measurement, in addition to extra info on the context of programming surrounding adverts operating on Netflix for model security monitoring functions, are close to the highest of entrepreneurs’ CTV purchasing lists, Goldman stated.
These considerations apply to the opposite gamers in Netflix’s aggressive set, in addition to to the broader CTV market. In 2024, the typical CTV advert marketing campaign operating by means of Innovid’s advert tech platform – which spans 95 million U.S. households – solely reached 19.6% of these households.
However Amazon additionally has a range of knowledge sources, advert codecs and e-commerce tie-ins to tempt shoppers, whereas HBO, Paramount, and Disney boast legacy infrastructure and many years of experience coping with advertisers. For now, Netflix sits within the uncomfortable center floor.
“There’s nonetheless work to do in making CTV behave extra like different digital channels,” stated Esme Robinson, director, platform options at Epsilon. “The information exists however stitching it collectively throughout platforms and gadgets stays a problem for a lot of.”
“The particular platforms that may win budgets would be the ones delivering outcomes, however with transparency – proving they’re reaching the best folks in the best context, with the best message,” she added.
Netflix has the measurement downside in its sights. Inside the final yr, it’s expanded its roster to incorporate offers with Affinity Options, DoubleVerify, EDO Inc, Integral Advert Science, iSpotTV, Kantar, Lucid, NCSolutions, Nielsen and TVision. Such companions are essential to unlocking bigger commitments from manufacturers, as a result of entrepreneurs wish to see viewership and engagement metrics confirmed by third events.
And on the latest analyst name, co-CEO Greg Peters promised analysts that the corporate had plotted out a “vital roadmap of options,” together with “issues like improved focusing on and measurement”.
That’s consistent with model calls for – however they’ll must see the proof within the pudding, earlier than unlocking the sort of spend the streamer hopes to safe.
