Netflix’s latest quarterly earnings report showed revenue up 13% year over year, while the hours subscribers actually spent watching grew just 2%, to more than 97 billion hours in the first half of the year, an improvement from 1.5% growth over the same period in 2025. Investors read the difference as a sign of a company whose revenue is outrunning the audience behavior that is supposed to justify it. Netflix’s growth plan now runs on squeezing even more value out of the audience it already has by selling advertisers into its live sports inventory, expanding ad technology, and a market position they can still buy into before pricing catches up.

Netflix’s Advertising Plans

Netflix’s ad business is on pace to roughly double its revenue to about $3 billion in 2026. Adweek reported that Netflix entered its earnings call in the advanced stages of its upfront negotiations, with plans to close deals within weeks and strong advertiser interest tied to live programming: the Women’s World Cup, its NFL package, WWE, and MLB’s Home Run Derby.

Live programming carries more weight in this plan because live audiences cannot fast-forward or skip through commercials the way on-demand viewers can. Live events also make up a small share of Netflix’s content library, just over 5% of content spend and roughly 1% of total view hours, yet they produced six of Netflix’s ten biggest new-member sign-up days over the past five years. Netflix is concentrating advertiser dollars on the hours that draw the most attention.

This approach extends beyond live sports. Netflix’s ad tier is expanding from its original 12 countries into 15 more markets in 2027, including Belgium, Ireland, the Netherlands, Poland, and Thailand. New ad inventory is opening in podcasts and vertical video, along with expanded brand partnerships on Tudum, Netflix’s fan site.

New Advertising Capabilities

Netflix’s ad tier launched in 2022, but the tools behind it continuously evolve. The company has built its own ad server, the Netflix Ads Suite, and deployed it across every market where it sells advertising. An AI-powered creative-matching tool, already piloted with DoorDash, Target, and TurboTax, is set to reach every ad-supported region by the end of 2026. Netflix is also testing AI agents that can manage, optimize, and purchase ad placements on a brand’s behalf, along with personalized ad loads and frequency caps that adjust based on what a viewer is actually watching.

Programmatic buying is expanding into Live and Pause ad formats through dynamic ad insertion technology. Netflix confirmed it began rolling out audience targeting through Amazon’s demand-side platform in the U.S. in the second quarter of 2026, with Yahoo’s platform following, adding to existing access through Microsoft, The Trade Desk, and Google’s DV360. A new Audience Insights API and Reach Curve API give advertisers self-serve tools to study Netflix’s audience and forecast campaign reach before committing budget.

On the data side, Netflix has added clean-room partnerships with Snowflake and Amazon Web Services, with InfoSum joining by year end, along with integrations with agency holding companies including Dentsu, Horizon, Omnicom, PMG, and Tinuiti.

The Advantages Netflix Offers Advertisers

Netflix sells ads inside a closed, brand-safe environment at a time when confidence in open connected TV inventory is falling. A July 2026 IAB report found that 43% of connected TV ad buyers have only somewhat or no confidence in where their ads are actually running, with the number rising above two-thirds for open exchange and programmatic auction inventory. If you have ever asked a media partner where your ad actually ran and gotten a vague answer back, you understand the problem Netflix is solving for. Netflix’s first-party platform, where the company controls placement and measurement directly, sidesteps much of that uncertainty.

Netflix’s content also creates attractive sponsorship opportunities for media buyers. According to data Netflix shared with advertisers, campaigns on the platform deliver close to double the television-industry norm on long-term brand building and perform 23% above competitor benchmarks on purchase intent. Dove’s partnership around Bridgerton produced more than a billion impressions across seven markets and close to a 60% increase in new shoppers for its products. Airbnb’s partnership around Nobody Wants This delivered more than double the industry benchmark for return on ad spend.

Netflix’s advertising business is also still small relative to the market it competes in, and that works in advertisers’ favor. The U.S. connected TV ad market is on track to grow nearly 14% in 2026, on its way to roughly $51 billion by 2029, and Netflix’s ad business remains a small piece of that total. Netflix’s $3 billion target leaves considerable room to expand, which gives advertisers an entry point before pricing and inventory tighten.

The Challenges Netflix Faces

Netflix’s advertising pitch rests on an engaged audience, and this was the quarter where engagement growth fell far behind everything else the company reported. If viewing hours stay close to flat while Netflix continues selling advertisers on reach and attention, that mismatch will eventually show up in advertiser renewals, even if it takes a year or two to appear.

Measurement remains a common complaint among media buyers. According to eMarketer, multi-touch attribution and clearer detail on the programming context around ads (needed for brand safety review) sit near the top of what buyers want from Netflix. Those concerns were raised in 2025, and Netflix has since added measurement partners including Nielsen, DoubleVerify, EDO, Integral Ad Science, iSpotTV, Kantar, and TVision, though its measurement capabilities still trail the largest streaming and digital platforms.

Netflix is also competing for the same advertising budgets as companies that hold advantages over Netflix. Amazon pairs its ad inventory with shopping data and purchase history. Disney, Hulu, and Paramount bring decades of advertiser relationships and ad-sales infrastructure. The reduced frequency of Netflix’s viewership reporting works against Netflix, since advertisers now have less independent visibility into whether engagement is holding up between the annual reports.

What Advertisers Should Do Next

If you are in a strong negotiating position, use it now, while Netflix is actively closing upfront deals and motivated to prove its ad business after a difficult quarter. Prioritize live and appointment programming, including NFL games, WWE, and major sporting events, over standard rotational inventory. That’s where Netflix’s case for guaranteed attention is strongest.

Before committing to a larger direct deal, ask Netflix which third-party verification partners will cover your specific campaign and what attribution data is available today rather than promised for later. If a large upfront commitment feels premature, test the platform first. Netflix’s inventory is now reachable through Trade Desk, DV360, Microsoft, Amazon, and Yahoo, which lowers the barrier to entry considerably compared to a direct insertion order.

Budget your Netflix campaigns as brand-building investments rather than direct-response investments until the company’s attribution tools mature. Ask Netflix’s sales team directly for engagement trends between reports, rather than waiting for the once-a-year release to find out whether the audience you are buying is still there.

Netflix is choosing to sell what it already has, faster and more aggressively than before. Advertisers who move while the company is still hungry to prove the model will get better terms.

True Interactive can help you succeed with connected TV advertising. Learn more about our capabilities on our website.

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