Netflix to introduce AI-generated ads appearing within shows and movies; here's what the company said
Netflix
has announced it will roll out AI-generated advertising, including pause ads, on its
ad-supported tier
by 2026. The company is developing a new type of ad that uses AI to integrate advertiser products with Netflix shows and movies. During Netflix's third Upfront event, the company demonstrated an example by showing how a product image will be placed over a background inspired by Stranger Things. For users on Netflix's ad-supported plan, this means seeing ads that blend with the content they're watching. The US-based streaming giant also noted that advertisers can insert these new ad formats in the middle of viewing or display them when users pause. These ads could include an overlay or a call to action when they are introduced by the end of this year.
What Netflix said about the AI-generated ads
At the event, Amy Reinhard, Netflix's President of Advertising, noted that the ad-supported plan now has more than 94 million global monthly active users and is used by more 18-34-year-olds than any other US broadcast or cable network. She also noted that ad members in the US are highly engaged, spending an average of 41 hours per month on Netflix.
In a blog post, while talking about the
AI-generated ads
, the company wrote:
'Netflix debuted a new modular framework for ad formats that leverages generative AI to instantly marry advertisers' ads with the worlds of our shows. This will create a better, more relevant experience for our members and drive the best results. Reinhard unveiled the first capability with interactive midroll and pause formats that build custom advertising creative with added overlays, call to action, second screen buttons, and more to serve the right ad to the right member at the right time. These formats will be available by 2026 in all ad-supported countries.'
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'I hope it's this: the foundation of our ads business is in place. And going forward, the pace of progress is going to be even faster. Plus, we already have the most important thing: the most engaged audience anywhere,'
Reinhard noted.
Meanwhile, the company did not specify the targeting methods for these ads, such as watch history or the content being viewed at the time. Also, details about the backend operation and presentation of these ads are currently unknown. However, Netflix has confirmed that these AI-generated advertisements are coming to the platform.
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