Netflix strikes deal with Microsoft for its ad tier

The Future. After talking with all the big ad-tech companies in the business, Netflix has picked Microsoft to help with the sales and tech side of its upcoming ad tier. That leaves Netflix to be a pure publisher. This move may be the start of a major paradigm shift for Netflix, which will almost certainly be required to share more viewership data with its new advertisers, who will want to know how their campaigns are doing.

Pitch bake-off
So, why did Netflix pick Microsoft?

• According to THR, they both saw eye-to-eye on privacy, especially when it comes to protecting customer information.
• Microsoft’s Xandr tech stack gives Netflix the ability to roll out the ad tier quickly, scale up if successful, and be flexible enough to change when things aren’t working as planned.

Also, it’s a bit of a coup for Microsoft as well, as it puts Xandr in business with the biggest streaming service in the world. We know some growth charts are getting overhauled at Microsoft while we speak.

A pure player
Another key factor in Netflix’s decision-making is that they’re probably not worried about a Microsoft+ ever launching. Other companies that were in the running included Roku, Google, and Comcast… but they are behind The Roku Channel, YouTube, and NBCUniversal’s Peacock, respectively. That’s some definite conflict of interest.

But advertisers will still get plenty of bang for their buck. By choosing Xandr, they’ll now have access to both Netflix and Xbox simultaneously (not to mention its connected TV business). As THR’s Alex Weprin says, it “may be too good of an offer to pass up.”