Netflix introduces AI-powered ads that blend into shows and movies Tezzbuzz  |  2025-05-17 10:24:29

At the Netflix Upfront event on Wednesday, it introduced a new advertising system that makes use of AI. Generative AI is used to blend advertising with the shows and movies you watch. The goal is to blend the ads with the content. It is part of the Netflix Ads Suitewhich is officially running in the US and Canada as of now. Next week, it will launch in Europe, the Middle East, and Africa, with all 12 ad-supported countries being covered by June.

Advertisers can use the platform to target more than 100 interests in 17 categories. It depends on Netflix’s own information about users and their actions. First-party tools allow advertisers to track how their campaigns are doing. Interactive mid-roll ads and pause-screen ads are expected to launch on YouTube by 2026. Examples of these are overlays, call-to-action buttons, and second-screen features.

New ad formats for better engagement

Netflix’s AI-driven ads are made to help the viewer keep watching. Generative AI mixes ads into the topic of the content. For example, an ad that they show during a sci-fi program might use the same kind of backgrounds and colours as the show. Interactive mid-roll ads will show up in between episodes or movies. Pause ads will show up if you stop watching the video or pause the content. Both formats can be changed so they fit the audience better.

According to Amy Reinhard, President of Advertising at Netflix, the ad business at Netflix is now set. She promised faster progress ahead. All ad-supported countries will have the new formats available by 2026. The company wants to reduce the disturbance of ads and increase viewers’ engagement with them.

Industry trends: AI ads gain traction

Many companies use AI to improve their advertising, not just Netflix. YouTube is experimenting with ‘Peak Points’, an AI program that places ads when users are most engaged with the video. The company will show a few ads on Prime Video from June 17. Those who pay for the service will have access to a mode without any ads. With these actions, AI-driven ads are now a common sight on streaming services.

The shift shows a growing focus on viewer experience. AI ensures that ads are tailored and do not bother the user as much. Tailor-made ads on streaming platforms could give some an advantage in the competition. Netflix is expected to take the lead in the new streaming market because of its new suite.

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