YouTube to Netflix, streaming giants are turning to AI for smarter adverts

Netflix's AI ad strategy aims to blend brands into the binge-watching experience. This followed YouTube's plan to use AI for contextual adverts placement

Netflix is set to roll out a new artificial intelligence-powered advertisement format that will enable seamless product placements within its shows and films. The announcement was made at Netflix’s annual Upfront event held on May 15.

Netflix ads suite

The upcoming AI-driven format will allow brands to integrate their products into Netflix content. According to a blog post from the company, Netflix shared examples where advertising images were superimposed on backdrops inspired by flagship shows like Bridgerton, Stranger Things, and Wednesday.

 

Amy Reinhard, president of advertising at Netflix, said:

 

"By controlling our own ad tech, we’ll be able to deliver newer tools, better measurement, and more creative formats. The Netflix Ads Suite is also designed to help you tap into the magic that makes Netflix Netflix. And it does that in a few big ways."

 

The Netflix Ads Suite provides a creative framework for ad formats that leverages generative AI to seamlessly blend brand messaging with Netflix content. The company said the approach is aimed at creating a more engaging and relevant viewing experience for users. In addition to creative enhancements, the Ads Suite will offer more deal options and easier transactions for advertisers.

 

AI-powered ads are expected to begin appearing on the platform from next month for users subscribed to the ad-supported plan. However, Netflix’s ad-supported tier is currently not available in India.

Industry trends: YouTube and Amazon join the AI ad push

YouTube is reportedly testing an AI-powered system called “Peak Points”, which will use artificial intelligence to insert advertisements at moments of peak viewer engagement.

Meanwhile, Amazon has announced a significant update to its Prime Video streaming platform, set to take effect from June 17. Films and shows on Prime Video will begin featuring a limited number of ads—fewer than those shown on traditional TV and other platforms. Amazon will also offer an ad-free subscription plan for users who prefer uninterrupted viewing.