It’s still too soon to tell what kind of impact Netflix’s proprietary ad tech platform is having on the streaming service’s larger revenue goals. After all, the new suite of tools just launched in the US and Canada on April 1.
Even still, the ongoing rollout has “gone well,” Co-CEO Greg Peters told investors during the company’s quarterly earnings presentation on Thursday.
“We’ve got many years of building ahead of us, but we’ve got a clear road map,” Peters added.
In the meantime, Netflix is coming out of the first quarter of 2025 in a strong position. Revenue for the quarter grew 13% year over year from $9.37 million to $10.54 million.
In a letter to shareholders, Netflix’s leadership attributed this to “slightly higher subscription and ad revenue,” although they still have not disclosed any official numbers for the advertising arm of the business.
Netflixonomics
Advertising revenue is still a small portion of Netflix’s overall business, although Peters reiterated the company’s previously stated goal of doubling that revenue by the end of 2025.
Netflix’s ads business has “plenty of room to grow” in the countries it serves, Peters said.
For the time being, however, it might be a good thing that Netflix is seeking a smaller slice relative to the “big ads pie” – meaning the larger CTV advertising landscape.
“That smallness probably provides us some insulation to market shifts right now,” said Peters, in reference to questions from investors about ongoing uncertainty in the market.
In fact, Netflix is actually seeing “some positive indicators” from advertisers in advance of May’s upfronts.
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The relatively lower cost of Netflix’s ad tier ($7.99 per month in the US and Canada) might help the company keep customers amid the ever-increasing possibility of a downturn, said Peters.
It also doesn’t hurt, said co-CEO Ted Sarandos, that Netflix produces original content – plus all the local jobs and tourism drivers that result from it – in 50 different countries, leaving the US-born company less exposed to global economic backlash.
The suite life
But anyway, back to the Netflix Ads Suite – or NAS, as we now know it’s called internally.
The new tech platform still needs to be rolled out in 10 remaining ad markets over the next few months. But in the US and Canada, where it’s already live, initial reactions are positive, said Peters.
So far, the biggest benefit seems to be that advertisers are granted more flexibility and fewer hurdles in the way that they buy and activate on Netflix inventory.
The team is also working on delivering more capabilities to NAS, including better programmatic availability, enhanced targeting features and more robust ad relevance, said Peters.
“We got a lot of work to do, for sure, but we think we’ll be able to move very quickly,” he added. “And, frankly, more quickly than other streamers.”
