Netflix Lowers Expected Ad Revenue Due to Slower Product Rollout
Netflix lowered its expected ad revenue for the year to $2.7 billion, down from a previous target of $3 billion, due to a slightly slower-than-expected rollout of certain ad product capabilities. The streaming giant announced the adjustment in a shareholder letter on Tuesday, even as total revenue projections for the full year remain on track to reach $51.1 billion.
Total Revenue Grows 12% Despite Ad Projections Revision
The downward revision follows a third-quarter earnings report showing total revenue grew 12% year over year to reach $12.9 billion. For the full year, the company expects overall revenue to climb 13%. Co-CEO Greg Peters addressed the ad revenue reduction during an earnings call, noting that the company’s advertising business is still expanding by more than 80% for the year.
If you are sufficiently aggressive with your roadmap, you’re going to occasionally be behind some milestones, Peters said during the call.
The adjustment stems from partner integration hurdles. Peters stated that the delays would not impact long-term financial gains.
Specifically, in this case, we’ve seen some delays in the rollout and partner integrations for some of those new ads products. So, getting to the integration model that we want sometimes takes a bit more work with our partners, but we strongly believe that a modest short-term hit for a better long-term strategic position is a good ultimate trade-off.
— Greg Peters, Co-CEO, Netflix
Netflix Expands Ad Measurement Tools to Include The Trade Desk
Earlier on Tuesday, Nicolle Pangis, vice president of U.S. and Canada advertising at Netflix, outlined upcoming enhancements to the platform’s ad measurement and programmatic tools. The updates expand the Netflix Ad-Suite beyond Yahoo DSP and Amazon DSP to include audience capabilities from The Trade Desk. Advertisers will also gain access to an enhanced Conversion API and a new Netflix Pixel supporting more than 20 lower-funnel conversion events.
