Netflix has been strategically expanding its advertising business since launching a more affordable ad-supported subscription tier in late 2022.

The ad-supported plan has seen remarkable growth, with global monthly active users increasing from 5 million to 40 million within a year.

This year, Netflix reported a more than 150% increase in upfront ad commitments, significantly driven by its upcoming NFL games streaming on Christmas Day.

The company has successfully negotiated advertising partnerships with major brands, closing over 60 campaigns with companies like Expedia, Coca-Cola, and McDonald's.

Additionally, Netflix has partnered with high-profile brands such as LVMH, Google, and Rakuten for the return of popular series like 'Emily in Paris'.

Looking ahead, Netflix is on track to achieve significant ad subscriber scale by 2025, which will support further growth in ad memberships.

To enhance its advertising capabilities, Netflix plans to test an in-house ad tech platform in Canada this November, with a global rollout expected in 2025.

The new ad technology platform will offer innovative buying options and measurement tools for advertisers, improving their overall experience.

Netflix's strong audience engagement has been a crucial factor in attracting advertisers, as evidenced by the high demand for ads on its upcoming films and series.

As competition intensifies in the streaming market, other services like Warner Bros Discovery's Max and Disney+ are also adopting ad-supported models to drive growth.

Despite facing challenges such as subscription sharing, Netflix's management, led by co-CEOs Ted Sarandos and Greg Peters, is actively addressing these issues.

While Netflix does not anticipate advertising to be a primary revenue driver in the near term, it recognizes its importance for long-term growth.