Netflix and YouTube Unveil AI-Powered Ad Innovations for Enhanced User Engagement

Netflix and YouTube are about to interrupt your watch party with AI ads

At a time when major streaming services are announcing more and more ads, two more are following suit -- and they're using AI. Also: I used Netflix's secret codes to quintuple my viewing options - here's how Two major media companies, Netflix and YouTube, announced plans this week to utilize new ad formats to keep users engaged, and both are using AI. Netflix's announcement came during its annual Upfront event for advertisers. Through a new in-house advertising platform, Netflix Ads Suite, the company is adding several creative ad formats. Also: Netflix's new AI search feature makes it easier to find what to watch Among them is an interactive ad format that uses generative AI to "instantly marry advertisers' ads with the worlds of our shows." From Netflix's description, it seems like these ads will blend into whatever show you're watching to feel less intrusive (but hopefully they appear different enough that it's clear it's an ad). These ads will be both midroll and on the pause screen, and will have custom overlays, second screen buttons, and more. The format will be available to advertisers by 2026. YouTube's announcement came during 2025 Brandcast, its annual event for advertisers. With the "Peak Points" format, marketers can specifically target the most impactful moment in a video (or when the most eyeballs are watching) to place an ad. While the ads themselves aren't created with AI, YouTube says it will use Gemini to find the most emotional point that hopefully leads to more engagement and more click-throughs. In an explanation to AndroidPolice, YouTube said that the timing for Peak Points ads is "carefully considered" to be close enough to the main point that it's still relevant, but not so close that it's disruptive. Mostly, the company explained, this is after the moment ends. The goal is to have a "thoughtful pause" ad break rather than an intrusion. Get the morning's top stories in your inbox each day with our Tech Today newsletter.

Netflix will use AI to make ad breaks look less like ad breaks

Emma Roth is a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO. Netflix is working on a new type of ad that will use AI to let advertisers "marry" their product with the streaming service's shows and movies. This may sound like Warner Bros. Discovery's plan to turn its IP into commercials, but during Netflix's Upfront event on Wednesday, the company demonstrated an example that placed the image of a product over a background inspired by one of its shows, like Stranger Things. If you're on Netflix's ad-supported plan, that means you might see an ad that blends in with the show you're watching, whether it's Bridgerton or Wednesday. Netflix says advertisers can insert this new ad format in the middle of what you're watching, or put them on the screen when you hit pause. They could contain an overlay or call to action when they roll out by the end of this year. It's not clear how Netflix plans to evolve these ads down the road, but its advertising president Amy Reinhard said the pace of progress "is going to be even faster." During the event, Netflix also announced that its ad-supported tier reached 94 million monthly users, more than doubling the 40 million it had at the same time last year.

Netflix is bringing generative AI to your screen -- but it's not what you think

If you thought ad breaks during your favorite Netflix shows were annoying now, wait -- they're about to get a lot more personal, smarter and probably even a little creepy. Netflix plans to roll out generative AI-powered ads by the end of 2025, with a full launch expected in 2026. Users will soon see commercials that are personalized by AI and meant to be less disruptive and more relevant to the individual viewer. Generative AI ads are designed to go beyond the 30-second commercials that we're used to. Instead, they're created using artificial intelligence to blend with the content on screen so they match tone, timing and viewer behavior. For example, instead of seeing a standard commercial, you might be offered a personalized AI-generated message for a product you Googled earlier that day during mid-roll breaks or after pausing a show. Yes, it's that specific. These ads might also appear as overlays or interactive elements. Netflix is positioning this as a less disruptive, more engaging experience that captures attention in new and subtle ways. It's safe to say that not everyone will love the idea of their favorite show turning into stealth advertising. The plan is to roll them out to users on Netflix's ad-supported tier, which reportedly has over 94 million monthly users. If you're paying for the cheapest subscription, you're the target audience. Netflix says these new ads will be context-aware, personalized and even interactive with clickable overlays, QR codes and product placement that evolve based on viewer behavior. This move is all about making ads more effective (and profitable). By using generative AI, Netflix can help advertisers reach specific viewer segments with hyper-targeted messaging. Instead of one-size-fits-all ads, brands could generate dozens or hundreds of versions tailored to different demographics, viewing habits and even moods. That's a goldmine for advertisers and a possible headache for viewers concerned about privacy and digital manipulation. If you're worried about privacy, personalization or just blending fiction and marketing, this new move raises questions. Will AI ads break immersion in shows? Will you know when something is an ad? And how much of your behavior is tracked to make these ad decisions? Netflix has yet to share exactly how much data will be used or whether users can opt out of this style of ad targeting. Given that these ads are only coming to the ad-supported tier, viewers who want an ad-free (and AI-free) experience may need to upgrade. Netflix's jump into generative AI advertising is a glimpse into the future of streaming, where ads are essentially engineered. On the one hand, it could make ad breaks feel less disruptive. On the other hand, it blurs the line between content and commerce in ways we're only beginning to understand. If you start noticing strange product cameos in your favorite shows next year, don't be surprised, it's just the algorithm watching.

Netflix ads are about to get an AI super-charge, and that's not chill

Netflix is introducing a new advertising system which employs generative AI, and they could get invasive. The plan is to improve ad relevance by using AI to offer experiences that are more useful to the viewer. Recommended Videos The reality, it sounds like, could be interactive midroll and pause overlays interrupting your viewing experience. This isn't coming to those who can afford to pay for the ad-free version, but it sounds like will be automatically introduced for those that have ad-supported Netflix. How do the Netflix AI ads work? After Netflix launched its own in-house advertising platform last month, it has been working towards more"creative" ad tech. The idea is that these new generative AI created ads are going to merge with the Netflix shows to create interactive experiences for viewers. Currently it's been relatively easy to ignore or move on from ads on Netflix. This update sounds like it will be a lot more invasive and far more difficult to ignore. It may even be more difficult to spot as this blending becomes more subtle. Why is Netflix doing this? It says that this will mean having "the most engaged and attentive audience anywhere". That sounds like something that will appeal to advertisers more than viewers. Although Netflix says it could mean viewers are more happy to take part in the interactive advertisment experiences. When is Netflix adding AI ads? The new AI ads are expected to roll-out to all ad-supported countries in 2026. This will appear on the least expensive of the Netflix plans, so you may have time to save between now and then to upgrade and get clear of these new AI ads. It looks like the days of streaming without interruption, or paying steep fees, are coming to an end as prices go up in a bid to produce the best content while staying profitable.

Netflix Doubles Down on Generative AI With Adverts in the Middle of Streams - Decrypt

The streamer has previously announced a partnership with OpenAI for an AI-powered search function. Streaming media juggernaut Netflix has announced plans to use generative AI to deploy interactive adverts to subscribers within streams on its platform. According to a report in industry trade publication Media Play News, Netflix plans to deploy generative AI across its midroll and pause ad formats, starting next year. The streamer, which launched its own in-house ad platform earlier this year, said it was working towards more "creative" ads from its in-house team, thanks to the use of new ad tech that it is still working on. Trade paper The Hollywood Reporter reported that the new ad product would use generative AI to associate advertiser copy and adverts with relevant programming on its service. The ads will be restricted to subscribers on Netflix's most affordable tier, which uses an ad-supported model that launched in 2022. There are currently 94 million subscribers at this level worldwide, of the 300 million total subscribers Netflix reported in its Q4 2024 earnings. Amy Reinhard, president of advertising at Netflix, claimed that Netflix subscribers "pay as much attention to midroll ads as they do to the shows and movies themselves." She added that the streaming service has "the most engaged audience anywhere," with ad-supported subscribers spending an average of 41 hours a month on the platform. Decrypt has reached out to Netflix for comment, and will update this article should they respond. This isn't the company's first use of generative AI; earlier this month it announced a partnership with ChatGPT creator OpenAI to develop an AI-powered search feature that will enable viewers to request personalized recommendations using natural language. Like many creative industries, advertisers have been grappling with the emergence of generative AI and its implications. British broadcaster ITV, for example, has rolled out a generative AI ad production service intended to "make advertising more accessible to small businesses." Last year, the BBC announced plans to use AI to create marketing materials for sci-fi show "Doctor Who," only to abandon them in the face of complaints from viewers. Netflix plans to roll out the new AI-generated ads in 2026 to all countries that offer its ad-supported subscription plan.

Get Ready For AI-Generated Slop To Interrupt Ad-Supported Netflix Viewing In 2026

The ad-supported tier of Netflix is going to get way worse, starting some time in 2026. That's when the streaming giant is promising to implement AI-generated ads and pause ad formats in the middle of watching shows and movies, according to a new report by Media Play News. It's a privilege for which users will be paying $8 a month as Netflix continues ramping up its ad business. "Either they have great technology, or they have great entertainment," the company's president of advertising Amy Reinhard said at its party for ad agencies this week. "Our superpower has always been the fact that we have both." It's not clear exactly what form the AI-generated slop will take and whether it will be catered to each individual viewer in real-time, but the Netflix exec sounded bullish on the strategy's financial prospects. "When you compare us to our competitors, attention starts higher and ends much higher," Reinhard said. "And even more impressive, members pay as much attention to mid-roll ads as they do to the shows and movies themselves." How much is that attention worth to Netflix? About $10 a month since the cheapest plan without ads is $18. To put that in perspective, Reinhard said people on the ad-supported tier watch about 41 hours of Netflix a month, which would include roughly three hours of ads. Starting sometime in 2026, however, at least some of those ads will be AI-generated and interrupting the middle of your latest Squid Game or Stranger Things binge-session, rather than being just at the beginning before a show starts streaming. What an incredible waste of everyone's time as as Netflix continues jacking up its prices and cracking down on password sharing. Meanwhile, things that might actually be neat like in-app TikTok-style feeds of curated clips from content available on the platform are only just getting off the ground. Netflix Gaming also remains as confusing as ever, even if there are a couple of neat-sounding games coming down the road. I can only imagine what certain execs are saying behind closed doors about the prospect of using AI to create quick, interactive adaptations of whatever show is currently most popular on the app.

Netflix Plans to Use AI to Blend Ads With Shows and Movies

Ads will only be shown on Netflix's ad-supported subscription tier Netflix unveiled a new artificial intelligence (AI) for its advertisers at its Upfront event on Wednesday. The streaming platform is heavily investing in its new in-house ad platform dubbed Netflix Ads Suite, and it showcased some of the features and tools that advertisers can leverage. The company also unveiled several ad formats to help its clients reach their desired targets. Part of the new formats, Netflix is planning to use AI to blend ads with the shows and movies to make ad watching an immersive experience. In a newsroom post, the company detailed the announcements made at the Netflix Upfront event. While one half of the event was dedicated to announcing the returning and new shows, movies, and documentaries the company was working on, the other half focused on the new ad services and the Netflix Ads Suite. The Netflix Ads Suite is a new advertising platform which is currently live in the US and Canada. Next week, it will be expanded in the Europe, the Middle East, and Africa (EMEA) region, and it is said to be available in all 12 countries where the ad-supported tier has been released by June. The new ad platform comes with various tools and features. It is said to let advertisers target their content to more than 100 interests in over 17 categories. Additionally, they will also be able to tap into first-party data of Netflix, including users' behavioural insights. It will also provide clients with first-party measurement solutions to let them see the traction from the ad campaigns. Finally, the company is also offering a new modular framework for ad formats. One of these uses generative AI to blend the ads with the theme of shows and movies. This means that when the user is watching the ad, they would not feel disconnected from the world of the content. Netflix says this will make the ads more relevant and drive better outcomes. Some of the ad formats that will be available to advertisers include interactive midroll, where interactive ads will be played in between an episode or a movie, and pause ads, where ads will be played whenever the content is paused. These formats can be further customised using added overlays, call to action, second screen buttons, and more. These formats will be available in all ad-supported countries by 2026. "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," said Amy Reinhard, Netflix's President of Advertising.

AI Ads Will Invade Your Netflix Shows and Movies in 2026

Interactive AI ads on Netflix will appear in the ad-supported tier, starting in 2026. Netflix is experimenting with Generative AI ads for its ad-supported tier. Speaking at Upfront 2025, Netflix's President of Advertising, Amy Reinhard, said that starting in 2026, Netflix will be launching AI-generated interactive ads. There will be two types of ads: midroll ads and pause ads. Midroll ads play in the middle of a show, and Pause ads appear when you pause a show. These ads will be powered by AI, so they will be more personalized and interactive. Netflix also said that its $7.99 ad-supported tier has reached 94 million subscribers, Media Play News reported. In fact, this cheaper subscription tier makes up for 50% of all new subscribers. As the cheaper plan gains popularity, Netflix wants to double its ad revenue. Speaking at the event, Reinhard said, "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." Meanwhile, YouTube is also planning to show AI ads using Gemini. These ads will appear just after emotionally engaging or "peak" moments in a video when viewer attention is at its highest. Not to mention, Amazon Prime Video is now asking users to pay for an add-on plan to avoid ads while watching movies or shows.

Netflix Reportedly Weaving GenAI Ads Into Programming | PYMNTS.com

Netflix is reportedly about to experiment with placing ads in the middle of its programming. The streaming service has created interactive "mid-roll" and pause ads that incorporate generative artificial intelligence (AI), the publication Media Play News reported Wednesday (May 15) from the company's upfront to advertisers. "[Netflix] members pay as much attention to midroll ads as they do to the shows and movies themselves," said Amy Reinhard, president of advertising at Netflix. Reinhard said that Netflix's $7.99 monthly ad-supported subscription tier now has 94 million subscribers worldwide, up from 70 million in November and 40 million ad-supported subscriptions a year ago. This less-expensive option now accounts for half of all new Netflix subscribers, the report added. The company launched an ad-supported option in November 2022. Reinhard said Wednesday that ad-supported subscribers spend around 41 hours per month on the platform. "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," she said. The new ad-supported plans come at a time when the subscription industry is witnessing a shift to more flexible and diverse pricing models, as PYMNTS wrote earlier this year. "Tiered pricing remains a cornerstone strategy, with companies like Netflix and Spotify offering different levels of access and features to accommodate varying customer needs and budgets," that report said. "This allows for personalized offerings and maximizes potential revenue." Research by PYMNTS Intelligence shows that 46% of consumers are "deal chasers" and will swap services to get a better deal, while other consumers can be enticed away from being loyal customers with a more affordable price. Meanwhile, Netflix Co-CEO Ted Sarandos last month outlined the streaming giant's vision for growth, which includes the goal of diversifying beyond online streaming while still expanding its core business. During the Semafor World Economy Summit 2025, Sarandos was asked how Netflix plans to reach its goal of becoming a trillion-dollar company, which seems difficult to achieve unless they expand beyond streaming. Sarandos first doubled down on opportunities in its core business, noting that Netflix captures only about 5% of consumer spending and 10% of TV watching time in its most mature markets. Thus, there is "enormous room to grow just in the things that we do," Sarandos said.

Netflix to Get AI-Generated Ad Breaks in 2026 - IGN

Netflix has announced it will roll out AI-generated advertising -- including the dreaded pause ads -- in the middle of its programming on the ad-supported tier from 2026. The news, which was reported by Media Play News, doesn't specify how the company will target the viewer for these ads; will they be individualized based on watch history? On whatever the viewer is watching at the time? At this point, we know next to nothing about how the ads will work on the backend, or even how they will be presented. But they are coming. President of advertising Amy Reinhard recently revealed that the company sees its effort as a merging of the things Netflix excels in. "Either they have great technology, or they have great entertainment," she explained at the recent Upfront for advertisers event in New York City. "Our superpower has always been the fact that we have both." The exec added: "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." Reinhard revealed ad-supported tier subscribers watch an average of 41 hours of Netflix per month, which, Kotaku worked out, equates to roughly three hours of ads per month for those viewers. That's a lot even if the ads aren't AI. But in 2026, they will be. Netflix has yet to give an official date for the change to be implemented.