Netflix Said It Would Never Run Ads. Now 190 Million People Are Watching Them.
May 28, 2026 - 41 minutes read
NOTE: This blog is a transcript from a podcast and therefore may contain errors.
Shannon Allen: Welcome to Digital Marketing ROI. I’m your host, Shannon Allen, and I’m here with my favorite co-host, Krystal. how are you today?
Krystal Vivian: I’m doing great, Shannon. How are you?
Shannon Allen: I’m good.
Well, today is gonna be kind of a fun topic. We have not had this topic yet- on the podcast. So we’re gonna talk about a platform that has flipped the streaming world on its head in three short years. Can you guess who that is?
Krystal Vivian: I’m gonna say Netflix.
Shannon Allen: It is Netflix. So Think about this. For over a decade, Netflix told us they would never have ads. Mm-hmm. Okay? they were an SVOD, sub- subscription video on demand. You went there, you had to pay a fee.
You know, back in the day it was cheap, right? I think I remember when it was 5.99 a month and- Yeah … it was subscription base. Yep. Now I, I think I’m paying, like, 24 for a family. Mm-hmm. So I don’t even know. Do you guys have it? Do you have
Krystal Vivian: ads?
We’ve always had to pay for a premium but still have ads on Hulu, and Disney, and ESPN. We used to have the non-ad version, but now we have the ad version. We cycle through our platforms, though. So I don’t even think we have Netflix right now, but when we do, we do do it without ads. Netflix is
Shannon Allen: always good for when I’m running low on something to watch.
It, you know, the AI in it, the algorithm knows me pretty well of what I like.
Krystal Vivian: Mm-hmm.
Shannon Allen: for a while there I was letting my ex-husband use my login. He didn’t create his own profile and I kept going and going, “That is such a stupid movie. I would never watch that.” why is that showing?”
Continue watching. Finally I said to him one day, “Are you using my profile?” And he’s like, “Well, yeah. What’s the big deal?” I go, “Create your own, dude.”
Krystal Vivian: Yeah. Yeah, you gotta have your own preferences.
Shannon Allen: You gotta have your own.
Krystal Vivian: Even- Yeah … Brendan and I have our own separate
Shannon Allen: Netflix profiles. Yeah, so my nephew Jackson has one at my house. So yeah, we’re gonna walk through kind of how they got there, because they are now, one of the fastest growing stories in CTV. Yep. So I kind of wanna touch on that, and FDS now has the ability to sell Netflix at a very affordable rate, and so it’s something we’re launching, we’ve launched with our reps and really just starting to talk to, our clients about.
Krystal Vivian: Well, let’s start at the very beginning then, because as you said, Netflix said for years, “We’re not doing ads. We are subscription based only.” It was their differentiator, right? Right. It was not just the content, but also we’ll never do ads. So what made them switch, and how did we get there, and how did we get where we are now?
Shannon Allen: So, Reed Hastings, who was the former Netflix CEO, he for years said that ads would never be a part of Netflix. He was very, adamant about that. And I do understand why, because Netflix did something nobody else was really able to do as… I mean, if you think back to when Netflix started, you know, they had it first where it was mailing to your house.
Krystal Vivian: Oh, yeah, that’s how I had it in
Shannon Allen: college. Okay. So mail it to your college dorm and mail it to our house. It has grown and evolved, and they were one of the first to really successfully get to the subscription, similar to what, like, a Dish Network or DirecTV did, but at a very affordable price.
So it was the quantity of people at a very low price. So that all changed in 2022, when their subscriber growth really, really slowed down because they were inundated with the AVOD platforms and soon to be the fast platforms that was just free ad supported, you know, content.
Krystal Vivian: Mm-hmm.
Shannon Allen: So they lost about 200,000 subscribers in Q1 of 2022, and so they knew that for the first time in a decade that they had to shift.
Krystal Vivian: Yeah.
Shannon Allen: And you gotta give them credit because they knew They needed another vertical that could bring in to supplement what they were losing at a very fast rate. So they launched the ad supported plan on November 1st of 2022, which was 6.99 a month.
It is now $9 a month, the ad supported plan is. So if you think about this, I think I was paying, 6.99 for a subscriber.
Krystal Vivian: Yes.
Shannon Allen: And now the ad supported has moved up to just under, $10 a month. Is
Krystal Vivian: more expensive than the
Shannon Allen: original was … than when it started.
Krystal Vivian: Yeah.
Shannon Allen: So in year one, the growth was slow because I just don’t think that people understood it yet. Mm-hmm. Right? And the ones… We’ve all been there. We’ve all said it, “Oh, I’m just used to not getting commercials, so I don’t, I don’t do that.” The problem is we all wanted… Everything was on a different platform that eventually we’re like, “No, no, no, no, I want that, so I’ll watch the ads though.”
Krystal Vivian: Yes.
Shannon Allen: We all got to that point. one of the biggest things, Was that advertisers didn’t really know what to expect, so when they were with, platforms like Hulu and Peacock, they were already experiencing it. They knew what it looked like. They weren’t sure what Netflix was gonna look like.
so I think people were hesitant. But by May of 2024, Netflix had 40 million monthly active users on that ad tier. That’s a huge jump.
Krystal Vivian: That’s a huge jump.
Shannon Allen: Yeah, so that, in a very short time, in less than two years, they made it there. So by November of 2025, that number jumped to 190 million monthly.
Krystal Vivian: Wow.
Shannon Allen: So I think what they also did in this time, I don’t have the stats here, but that they started to raise their subscription prices.
Krystal Vivian: Yes.
Shannon Allen: So the ones that wanted to stay there were gonna pay that premium, and the ones that didn’t would drop down to the different tiers.
Krystal Vivian: Well, and I’m sure that that was part of the cancellation too.
Oh, yeah. Of like, ’cause they always try to get you to stay when you-
go to cancel,
Shannon Allen: I mean, but think about it. They grew five times in 18 months.
Krystal Vivian: That’s wild.
Shannon Allen: I know. So that revenue was a big measurement that they needed to work with. they were seeing a 2.5 times jump in revenue, which that’s what they were missing.
So it worked, right? this pattern worked, and it works for us. It works for our clients because now we have, into something that we considered a walled garden, right, Facebook, YouTube TV, walled gardens that you can’t get in, this is another way to get in, and I’m excited that we offer it starting as low as 1,500 a month with some of our Netflix clients.
But this is really the evolution I was waiting for, was one more piece of the puzzle that isn’t selling, their ads programmatically, but you can buy the ad tier directly through Netflix.
Krystal Vivian: So let’s talk about the walled garden aspect of it because that is something that we’ve talked about with Facebook and with YouTube, as you said, and it’s not to say that a walled garden is bad.
No. It’s just that it can’t be the only. But when you’re thinking about your CTV mix- And you’re thinking about how to spend, your budget for that. what should a local business owner be thinking about when it comes to the walled garden of Netflix and the value there?
Shannon Allen: Okay. So again, let me just reiterate, a walled garden is
a platform that controls its own ad inventory, right? Mm-hmm. In order to buy Facebook, you have to go to Facebook. It does not sell it, programmatically in an auction, right? It doesn’t give their unused inventory to a platform that just divvies it up. The beauty of how we sell CTV with our clients is that we work programmatically, right?
We have a combination of multiple different platforms similar to Netflix that sell it as an auction. So then we have a lot of consumer journeys that we can create. Now, when we wanna go to Facebook, for instance, we have to go through that walled garden to buy inventory. Of course, they’re not a streaming platform, but in comparison, something like Amazon Prime is also a walled garden, right?
So you either go direct or you buy through a platform, and Netflix is not part of any of the programmatic buys right now. So it is a walled garden. YouTube is a walled garden. Amazon Prime is a walled garden. Hulu and most of the open streaming ecosystems are not. So Hulu, not to be confused with Hulu Live, Hulu is d- is a part of a network platform that we do that auction, right?
We programmatically do it. So why does this matter? So when we run that typical CTV campaign, we know that we can reach whoever we want. Netflix has good targeting, and there’s a lot of people watching Netflix, but just like YouTube TV, I think in one of our other podcasts we talked about, people think everybody’s on YouTube TV, when truth is it’s, like, under 3% of viewership is coming from there because it’s so fragmented out there.
There’s so many different things we could be watching,
Krystal Vivian: Well, and so many people think, “Well, my neighbor and my best friend and my cousin, we all watch YouTube TV.” everybody I know watches YouTube TV,” so they think that that’s everybody in the world. But that’s where you have to look at the data to say, where is viewership actually at?
Shannon Allen: Yes. And for me, if I was talking to a client, I would very much want them to reach the audience of who we’re trying to target instead of trying to dictate a platform. However, there are instances where if somebody really wants to dip their toes, ’cause I think of Netflix as a layer to what you’re already doing with CTV, but if somebody doesn’t have the buy-in, that is a good door to start with, is just using Netflix to see, ’cause we know there is a lot of viewership there as well.
Krystal Vivian: let’s talk about where we are right now with advertising on Netflix. So it’s a walled garden, but they’re also, like you said, they have really good targeting there.
Who’s actually watching Netflix with ads, and why does that matter for our local business owners?
Shannon Allen: They currently have 325 million global subscribers, and out of that, 190 million of them are the ad-supported tier. So if you are subscription-based, you are not part of this, you’re not gonna see that.
So that is more than half of their entire base. So in the US, that ad tier skews younger and more diverse than traditional cable. So this is a really good example of a one-off of cable, because from a viewership standpoint, you’re looking at some similarities. I mean, cable is still higher than a true Netflix, believe it or not, but it’s also, has a lot of different things that you could be watching it on.
Krystal Vivian: Mm-hmm.
Shannon Allen: when you’re buying Netflix, You can target by content but you can also just do, if you think your audience is 18 to 25, you could pick, you know, you can target that way on Netflix as well.
Krystal Vivian: Okay.
Shannon Allen: 70% of the US ad tiers tune in daily.
So some of this is their main form of TV, which helps us understand that 18 to 34-year-old skew, right? The average viewer watches about 41 hours per month.
Krystal Vivian: Wow.
Shannon Allen: that is a lot of impression opportunities. So you can reach a good amount of people with a high frequency on there because of the amount of impressions.
Krystal Vivian: Well, and if you think about that from a math perspective, there’s 30, 31 days in a month- so 41 hours, so they’re watching more than an hour a day.
Shannon Allen: Yeah. So really, these are not light TV watchers. These are hardcore, they have their algorithms set, their profile, they know exactly what they’re gonna get, what’s gonna come next, they’re waiting to see what’s coming up new.
So this is their main form of entertainment. And I have talked with a lot of people that they are leaning, more people do it this way in a sense, that are younger, because they’re not missing linear TV. Yeah. So they’re not running to the YouTube TVs of the world, or they’re not running to, you know, anything that shows, you know, the Hulu lives or things like that, or cable for sure, because that’s not how they were brought up.
They were brought up sitting in front of Netflix, watching it on a subscription-based platform, right?
Krystal Vivian: And they’re gonna watch whatever is the hottest, latest show, which a lot of the times, is on Netflix.
Shannon Allen: Yes. And the nice thing about who is watching it is we kinda know who’s watching it, but it’s not ad fatigue.
Netflix does do a good job of this. these ads are still unskippable. Only one or two ads are per ad break, which is, not so hard. Like, Peacock is more like that. there’s not a ton of ads in there.
Krystal Vivian: Yeah.
Shannon Allen: Sometimes I feel like, some of the ads on even Prime or even, Prime’s not horrible.
Hulu live is bad
Krystal Vivian: Hulu is Hulu is- It’s
Shannon Allen: like four minutes
Krystal Vivian: sometimes … and Disney is two minutes.
Shannon Allen: Yeah.
Krystal Vivian: And so,
Shannon Allen: like- Yeah, it’s more than one or two-
Krystal Vivian: Yes …
Shannon Allen: ads, yeah. And a lot of these ads are 15s or 30s.
Krystal Vivian: Yes.
Shannon Allen: There’s not very many
Krystal Vivian: I’ve noticed that it’s usually, because we watch Disney a lot in our house with a four-year-old, it’s usually, like, two or three 30-second ads, and then the rest are 15s.
Shannon Allen: Yep,
Krystal Vivian: And it always ends with a 15. The 15’s always at the end of the break.
Shannon Allen: I think credit unions are constantly trying to go after a younger generation to get them to not be using the Venmos of the world and stuff like that, and are leaning into trying to find a younger audience.
Well, Netflix is where you’re gonna find them. You’re not gonna find them on cable.
Krystal Vivian: No,
Shannon Allen: So you’re gonna find them streaming, but if you really wanna do something a little bit more niche, Netflix is, is a really good idea. So that, with local businesses understanding who the audience is and who are the subscribers, that’s really good to know that is that younger 18 to 34.
It doesn’t mean that somebody my age isn’t watching it, doesn’t mean somebody my mom’s age isn’t watching it. It just means that some people at that age group are more likely, they’re not used to paying for the paid subscription.
Krystal Vivian: Well, if you look at the average or what it skews towards is just who dominates.
Yeah. But everybody could be watching Netflix.
So there’s other new tools that Netflix is rolling out in 2026 specifically for advertisers. dynamic ad insertion, interactive ads. What should our listeners know about where Netflix ads are going?
Shannon Allen: So 2026 for sure is the year that Netflix decided, okay… I mean, half the reason why I have the Netflix platform to work with is they’re starting to work with very specific, demand side platform companies out there to work with media companies and digital agencies like ourselves to really push this platform, right?
So they really wanna grow what they’ve got from an advertiser standpoint, so they’re launching the advanced targeting now. So that lets advertisers reach audiences by education level, you can reach it by marital status, household income, and also what they call high, propensity viewers. Mm-hmm.
So think people likely to buy a luxury vehicle, right? So now we’re moving up a little bit in the world, as opposed to just the 18 to 34-year-old. this could be somebody that’s looking for a luxury travel package, right? they’re going to Europe, you know, that kinda thing. So they’re starting to differentiate themselves into what I would consider an audience segment.
They’re also working with what we’ve talked about in a lot of things we do, which is dynamic ad insertion. So they’re testing this with WWE, and they’ll expand to the NFL, during Christmas Day games, which remember, Netflix Christmas Day game in 2025 was the most watched streaming, platform in-
history. Yeah. Yeah, in history. I’m sure we’re gonna beat that.
Krystal Vivian: Yep.
Shannon Allen: So this means Netflix can swap in different ads based on the viewer. So it’s like doing true AB testing- … but doing it live, right? So even during live programming, they’re going to be able to do this
Krystal Vivian: now. So live football typically, ’cause typically- Yeah
on live sports-
Shannon Allen: Oh, yeah …
Krystal Vivian: you’re getting the same ad- Yeah … that other people are getting. Now, we have the ability to do live sports as targeted. but it’s incredible that Netflix is now offering that too- Yeah … because that’s a big deal.
Shannon Allen: Now, this is gonna be definitely a higher tool. This isn’t something that we’re living in right now with what we’re, working with our clients on.
And I do think this is something that we’re gonna have at our fingertips. We’re starting more with more entry level of that 18 to 34-year-old with some basic targeting, but their tier levels are going up, and They’re only gonna grow, and at some point they’re gonna open this up to more than just really large businesses like Nike or, Meijer out there.
they’re gonna do it with really big businesses. They’re gonna offer it to any business that wants to have that, that really dynamic ad inserted. Right? So I mean, really cool things are coming down the pipeline. So the interactive videos are rolling out in the US and Canada first, with a global rollout planned for right now in Q- Q2.
So we’ll kind of keep that going. We’re at the end of Q2. I haven’t seen a ton of that, but I’m sure we’re gonna get some case studies on this. but basically if you can picture a viewer being able to click a Netflix ad and add an item to their cart, like we’ve always talked about this, there is no click-
Krystal Vivian: Yeah
Shannon Allen: that’s going on because there’s no reason to. Netflix is, I think, trying to do a test to see is that something people would do- when they’re watching TV … ‘
Krystal Vivian: I see on Amazon where it’s like, “Add it to your Amazon cart.” On Netflix is it like, “Send me an email”? Is it like-
Shannon Allen: I don’t know the answer to it. We haven’t seen it, yeah. I mean, my problem is, and I probably need to move to this, but I’m on the subscription bait, so I don’t see it a lot. So I have to do, pull mine a lot from, any of my research. So did you say you do have it as
Krystal Vivian: No, we don’t, I don’t think that we have the ad-supported version-
Shannon Allen: Well, we, I need you
Krystal Vivian: to do
Shannon Allen: that
on Netflix.
Krystal Vivian: I can do that.
Shannon Allen: think about this too. they’re gonna be expanding what we call the programmatic partnership, right? So I talked about this earlier with the audience, and what’s the benefit of the walled garden. But they are starting partnerships with The Trade Desk, multiple DSPs.
So Trade Desk is a demand side platform. they’re working with Yahoo, the demand side platform, Amazon, Google’s DV360, which is their demand side. So they’re really looking to start to pull that partnership together with LiveRamp, who is part of that equation of how you can start to, do the targeting better.
So right, first you need inventory, which is demand side, and then you need targeting capabilities, which is LiveRamp.
Krystal Vivian: Mm-hmm.
Shannon Allen: So it’s going to get better and better and better. We wanna get there. You know, they started at 4,000 clients, and look where they’ve grown.
Krystal Vivian: Yeah.
Shannon Allen: Three years ago it was a handful. That tells you that the industry believes Netflix is a real channel now on this AVOD platform, right?
Krystal Vivian: So let’s talk about FDS’s offering of Netflix because we just launched it now with our marketing consultants and with our clients. we’re starting to have these conversations.
What does a Netflix buy look like for our audience?
Shannon Allen: Okay, so that’s a great question. When I do the training, I really talk about this as a layer to CTV. Again, I’m okay if it’s an entry point as well. But knowing that 190 million monthly ad viewers, knowing that they’re 41 hours, of TV time per month, 60% are choosing this ad plan, right?
So the way that we set it up right now, we are setting it up, it’s a $50 CPM. It’s very expensive. But we also are only starting an entry point of 50,000 impressions monthly. So 50,000 impressions to start as a bare minimum at a $50 CPM.
So if you’re buying directly from Netflix, you could pay up to $65 a CPM, and a lot of their minimums are gonna make you spend, in that 500K plus in a year. Right. Right? we’re not requiring that.
Krystal Vivian: That’s the benefit of working with
Shannon Allen: agency.
That’s the benefit of working directly with a digital agency. So we have the ability to target age, gender, household incomes, right? Homeowners, families with children. We can do the content, right? Do you wanna target somebody in action, comedy, drama, romance, right? Sci-fi. So you really wanna find an 18 to 34-year-old female, go after the romance.
Right? You can do geotargeting by DMA, state, city, zip code. So any of those, just like we can do with any of our CTV. You can also daypart, right? You can make the decision to say, “I want morning, daytime, evening, primetime, overnight.” Now, I always tell our clients, “Why are we dictating when consumers watch their TVs?
Why are we making that decision?” People don’t work 8:00 to 5:00 jobs anymore. People consume at 3:00 in the morning if you can’t sleep. We should let that run naturally, in my opinion, unless you really have a very good reason of what you’re trying to accomplish.
Krystal Vivian: Yeah, I would agree with that.
So the one thing that came to mind when you were talking about that, especially when targeting by content, was all of the holiday Hallmark movies that are on Netflix-
Shannon Allen: Yeah …
Krystal Vivian: every,
Shannon Allen: other
Krystal Vivian: season. Oh, yeah. If you’re trying to reach women.
Shannon Allen: Well, honestly, there’s a lot of cool strategies you could do with this.
I like to start more organically and see how something is working and what the results are. And again, don’t always dictate when consumers take in content.
Just decide that they, we know they’re on Netflix.
Krystal Vivian: Mm-hmm.
Shannon Allen: Right?
Krystal Vivian: Yes.
Shannon Allen: And then again, you can do devices. it can be any device. I mean, the bulk of it’s gonna deliver to your large screen, but it can be desktop or mobile. Some, kids are watching it directly on their laptops every day.
Krystal Vivian: Mm-hmm.
Shannon Allen: And we can deliver that.
And so you can choose either a 15 or 30. We do not do 60s, just 15s and 30s, just because that’s what Netflix platform, they offer it, but it’s more expensive, and they’re just not as, engaged, right? So we do that’s pre-roll and mid-roll, and they’re all unskippable. So it really is a value to go and either layer it on to an existing campaign or get it, your feet wet, start from the ground up.
Krystal Vivian: So let’s bring it back to ROI because that’s the main focus of our podcast here. For a local business owner trying to decide if Netflix belongs in their digital plan, what does the math look like and how are we tying it back to ROI for them?
Shannon Allen: We always love the ROI question.
again, at a $50 CPM, you know- Which is the $2,500 buy. We think that’s a very good entry level price for what you’re gonna accomplish. Grow to 100,000. You know, get to 150,000 if we see that there’s more reach that we need or has a low frequency. But the ROI conversation is still getting back to their original goals.
Like, what are we trying to accomplish with ROI? What’s the goal of running CTV in general, right? So Netflix generally isn’t always a standalone buy if you’re mixing it in. The goal is to follow the consumer journey. So for an auto dealer or credit union, you know, the answer is be there.
That’s one more layer of where you’re gonna reach farther into the consumer journey. So ultimately, the more people we reach, then we’re gonna able to track, are they coming back to your website? Are you seeing sales go up? How are you tracking that? We are tracking website conversions, which means we delivered them the commercial, went back to the website within 30 days.
That’s a great trackability. But it’s really about, this is where one of those conversations, just like why you buy radio and TV back in the old days with TV, is, Somebody didn’t walk in and say, “This is how many people converted to your website.” We really measure sales and phone calls and website traffic, right?
So an ROI conversation is only as good as the information we’re given from a client and what the ultimate goal is. But I do like to be very clear, CTV is still … It’s one step closer to targeting that old school broadcast TV doesn’t offer, and there’s a lot of businesses that have run that for years without any ROI measurement.
Krystal Vivian: Mm-hmm.
Shannon Allen: In my opinion, how we bring it back to ROI, when you start any campaign, set your standards and your goals of what are you trying to accomplish, and if you accomplish those sales goals, those form fills, the website traffic, more leads that you’re trying to close, we can only bring them to the website, right?
We can’t necessarily walk through the deal with them. But set those goals up front, and then see if there is an increase because of the branding that we’re doing.
Krystal Vivian: Well, the branding I think is key because when we talk about our solution, CTV for us falls under branding.
Right. It’s not a lead generator, but that brand awareness- is really powerful. And so just knowing that you’re targeting these people on this platform- is really powerful. And That’s a great way to measure ROI
Shannon Allen: Well, I like to say this too: $50 CPM, my reps at first were like, “Whoa,” ’cause our highest rate on
Programmatic is going to be a cheaper buy. But there’s TV linear out there selling OTT at $50 CPM, $45 CPM. We’re lower than that. We’re at 42, and if you blend it, we’re at 39 for the premium targeted.
Krystal Vivian: Yeah,
Shannon Allen: for our most targeted capabilities. Not just basic. Yeah, I mean, you can buy- Blended for $20 CPM if you’re just going for high reach.
Krystal Vivian: Mm-hmm.
Shannon Allen: But there is gonna come a point when Netflix is gonna be supply and demand. And so at a $50 CPM now, it’s very affordable, because it’s gonna get to 60, $70 CPM.
Krystal Vivian: Mm-hmm.
Shannon Allen: It even goes higher. I mean, there’s some of these minimum buys are that to even buy it is 15,000 a month.
I mean, that’s YouTube TV. Like, on a base level, wholesale level, you’re gonna pay that. But on a retail level, you’re paying 28 to 30,000 a month to be on YouTube TV. And Netflix, if you go really high, you might be paying that. But this is an entry level to really get your feet wet, and especially from a local standpoint with a DMA, just in your DMA you can reach your Netflix people.
Krystal Vivian: It’s incredible.
Shannon Allen: So it’s a good, it’s a good thing. This was fun. We’ll do another, a follow-up maybe in a couple months and see what’s changed and what some of that AB testing was doing. I think that’d be a fun one to do.
Krystal Vivian: I think so too.
Shannon Allen: Yeah. Well, thank you to our listeners for tuning in today.
We know that Netflix is gonna be that big story, so we’ll do a part two in a couple months. This is Shannon Allen and Krystal. Thank you for listening, and tune in to our next episode of Digital Marketing ROWhy.