Netflix to Roll Out Interactive Ads, Focus on Personalised Content
Netflix will introduce interactive advertisements in the second half of 2025, revealed Co-CEO Gregory K. Peters during the company’s Q2 2025 quarterly earnings call. It has finished rolling out its ad platform globally based on positive feedback from advertisers. The company also planned to work on improved targeting and measurement, leveraging advertiser and third-party data sources and personalisation of ads. Netflix would also be adding Yahoo! as a source of advertising.
AI Integration:
Peters stated that Netflix intended to leverage AI to bring about better content personalisation and recommendations. He mentioned that Netflix was piloting a conversational interface that allowed users to search for content using natural language, intended to make discovery easier and more interactive. He added that generative AI could also help create brand-focused advertisements within existing content universes.
Co-CEO Theodore A. Sarandos added that Netflix was using AI to help creators cut costs in production.
Gaming:
Peters stated that Netflix planned to focus on user acquisition first for its games vertical, which he claimed may bring about increased monetisation opportunities. The company planned to increase its investment in the area gradually.
“We look at the near-term monetisation opportunity with games very similar to how we’ve looked at other new content categories. You can think in scripted or film or on and on. And that’s essentially it: if we deliver more value to our offering, we get increased user acquisition, we get increased retention, and we get increased willingness to pay,” said Peters.
Live Events:
“We remain focused on ownable big breakthrough events,” stated Sarandos when describing Netflix’s events strategy. Rather than spending heavily on traditional sports rights (e.g., F1 or MLB), Netflix is prioritising “ownable” live events with high cultural impact and economic viability. Examples include the NFL Christmas Day doubleheader, WWE matches, and the upcoming Canelo vs. Crawford fight.
Financial Metrics:
Netflix earned $11.07 billion in revenue in Q2 FY 2025, which stretched from April 1 to June 30. This was a year-over-year (YoY) growth of 15.9%. The company also earned a profit of over $3.12 billion, which is an increase of over 45% YoY.
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Netflix’s operating revenue was $3.77 billion, up 45% YoY, with a margin of 34.1%, which also increased by 7 percentage points YoY.
“Year-over-year revenue growth was primarily a function of more members, higher subscription pricing, and increased ad revenue,” said Netflix in its letter to the shareholders.
The highest revenue growth was seen in the Asia Pacific region, which grew 24% YoY to $1.3 billion. The Europe, Middle East, and Africa region grew by 18% YoY to $3.5 billion, while the revenue for the US and Canada grew 15% to $4.9 billion, making it the biggest earner for the company. Meanwhile, Latin America saw its revenue grow only 9% to $1.3 billion.
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