The news: After months of speculation, Netflix announced that it has chosen Microsoft as its technology and sales partner for the streaming service’s upcoming ad-supported subscription tier.
What this means: Netflix’s advertising initiative started off on the back foot, but partnering with an established firm like Microsoft will help ease concerns about the effectiveness of its ad offerings.
Privacy is king: The ad-supported video gold rush is reaching a fever pitch at the same time that the advertising industry faces a privacy and addressability crisis. Both Disney and Netflix’s announcements directly confront those needs.
Microsoft’s adtech rise: Microsoft has invested heavily in its advertising business over the last year, and a partnership with a platform as prominent as Netflix could help it eat up a larger share of the digital ad market.
The big takeaway: After months of criticism, Netflix’s choice in Microsoft will go a long way to steady the waters around its ad-supported subscription tier while helping Microsoft solidify its position as a major player in digital advertising.