Netflix to Start Showing AI Ads Inside Shows and Movies by 2026

Highlights

• Netflix will introduce AI-generated ads within shows and movies for users on its ad-supported plan.
• These ads will blend into the content and appearing as overlays or during pauses.
• Meta is also pushing AI-driven advertising, aiming to automate the entire ad process.

Caption – Netflix to bring AI-powered ads by next year. (Photo by Thibault Penin on Unsplash)

Netflix has announced it will start using AI to create ads that appear inside shows and movies on its ad-supported plan by 2026. These ads will be more than just traditional commercials. They will actually blend into the content you’re watching.

For example, Netflix showed a demo at its third Upfront event where a product image appeared over a background inspired by Stranger Things.

Users on the ad-supported plan can expect to see these AI-generated ads pop up during shows or movies, either as overlays or when they hit pause. The company said these new ad formats might include call-to-action buttons and could roll out as early as the end of this year.

What Netflix Said About AI Ads?

At the event, Amy Reinhard, Netflix’s President of Advertising, shared that the ad-supported plan now has over 94 million global monthly active users. She also said it’s more popular with 18-34-year-olds than any US cable or broadcast network. According to her, US users on the ad plan spend an average of 41 hours a month on Netflix.

“When you compare us to our competitors, attention starts higher and ends much higher. And even more impressive, members pay as much attention to mid-roll ads as they do to the shows and movies themselves,” Ms Reinhard said.

“So if you take away anything from today, 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,” she added.

Explaining about the AI-generated ads in a blog post, 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.”

“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.

While Netflix confirmed that AI-generated ads are on the way, the company hasn’t revealed how exactly the ads will be targeted, whether based on viewing history or the show being watched at the time. Technical details about how these ads will work behind the scenes are also still under wraps.

Social Media Isn’t Happy

Many social media users were quick to express frustration. One user asked, “Are they testing new Black Mirror episode ideas on us now?”

Another said, “They already raised their prices. Now they want MORE revenue by using AI ads? Go away, Netflix.” A third added, “At this point, they are nudging us to go alternative routes of streaming.”

Are AI Ads A Growing Trend?

Netflix isn’t the only one moving in this direction. Meta is also pushing hard into AI advertising. Earlier this month, CEO Mark Zuckerberg said Meta aims to handle the entire ad process with AI from writing copy to targeting the right audience.

“We’re going to get to a point where you’re a business, you come to us, you tell us what your objective is, you connect to your bank account, you don’t need any creative, you don’t need any targeting demographic, you don’t need any measurement, except to be able to read the results that we spit out. I think that’s going to be huge, I think it is a redefinition of the category of advertising,” said Mr Zuckerberg.

Meta has already rolled out a new AI model for Reels recommendations that boosted conversion rates by 5%. More than 30% of Meta’s customers are now using its AI tools to create ad content.

 FAQs

Q1. What are Netflix AI-generated ads, and how will they appear?

Answer. Netflix plans to introduce AI-generated ads within shows and movies on its ad-supported plan by 2026. These ads will blend seamlessly into the content, appearing as overlays or during pauses, possibly featuring call-to-action buttons.

Q2. How are social media users reacting to Netflix AI ads?

Answer. Many social media users expressed frustration, seeing AI-generated ads as intrusive. Some joked about Netflix testing Black Mirror-style ideas, while others criticised the company for prioritising revenue over user experience.

Q3. Are AI-generated ads becoming a trend in the industry?

Answer. Yes, other companies, like Meta, are also embracing AI-driven advertising. Meta aims to automate the entire ad process, from ad creation to targeting, and has already seen increased ad performance using AI tools.

Also Read:

• Netflix brings in new shows and movies for December 26 week

• Netflix rolls out ‘My Netflix’ — A new tab for trailers, reminders, and more