Inside the state of Netflix’s ad sales—media execs react to Peter Naylor’s exit

Netflix shocked advertisers yesterday when it announced the departure of Peter Naylor, the streamer’s VP of ad sales. The streamer’s advertising business has had its ups and downs since launching its ad tier in 2022, and according to six industry executives, Naylor’s exit may be part of its new plan to scale its ad business and in-house tech platform as quickly as possible. Check out the latest Ad Age events and award programs “It felt to me like Peter was a perfect fit for this company that was great at tech and content, but no experience in advertising—to be that bridge to the buying community,” said one media buyer. “I certainly don’t think [Naylor’s exit] will help them in the short term, but it’s hard to say the long-term impact without knowing who might step in. It will be hard to do better than Peter.” Another media buyer said Naylor’s renown in the market is why “the writing was on the wall.” The buyer said that while Naylor introduced Netflix to the ad market and built out its sales force, the strength of which shouldn’t disrupt Netflix’s ongoing upfront negotiations in Naylor’s absence, he overshadowed the product he was selling. The buyer compared his presence to Linda Yaccarino’s while chairman of advertising at NBCUniversal. The buyer said Amy Reinhard, who was named president of advertising at Netflix late last year, was the company’s answer to revamping leadership with people “who speak Netflix.” Naylor declined to comment on his departure. Also mean: What Naylor’s exit means for Netflix Reinhard replaced Netflix’s initial ad head Jeremi Gorman, who was in the role for just over a year. Reinhard has been with Netflix for nearly eight years, working in content acquisition and studio operations prior to taking the lead of its ad business. “Peter’s enthusiasm, industry knowledge and relationships have been invaluable in getting our advertising business off the ground,” Reinhard said in a statement. “I want to thank him for all he has done to build our team, grow the business and position Netflix for success.” The second media buyer said that although Reinhard hasn’t been in the role long, she’s already made her ambitions for transforming Netflix’s ad business quickly clear. That included pulling the plug on Microsoft’s exclusive ad tech partnership a week before Netflix’s upfront after hearing feedback that buyers were seeking more programmatic platforms for striking deals with the streamer. “Jeremi was let go seven months ago, and the new boss is shaking things up and rebuilding with her own vision in mind,” a source close to the situation previously told Ad Age. Netflix is now building out an in-house ad tech platform to launch in 2025 following tests later this year, and rolling out programmatic partnerships including Google’s Display and Video 360, The Trade Desk and Magnite this summer. The plan is for the expanded access to Netflix inventory to grow ad revenues while the streamer works to expand its ad-supported subscribers through its password-sharing crackdown and growing the price gap between its ad-free and ad-supported subscriptions. Read more: Inside Netflix’s ad tech journey In its second-quarter financial report, Netflix said it expects its ad tier to reach “critical ad subscriber scale” in 2025, a continued sticking point with advertisers as the streamer competes for ad dollars against major tech companies and TV network groups. But Netflix added that it doesn't expect advertising to be a “primary driver of our revenue growth” this year or next. ‘Seems very Netflix’ A third media buyer said the sudden announcement of Naylor’s departure “seems very Netflix to me,” calling back to the fast departure of Gorman. “They have a good sales org in place because (Naylor) hired so many,” said the buyer. The executive shakeup “is a reflection of very large ad targets and no ability to meet them with limited inventory and the stiff market competition, aka the influx of inventory in streaming from Amazon. They may look to reduce costs on the ads side of the house.” A Netflix spokesperson said that in place of Naylor’s global role, Netflix would seek an ad sales leader for the U.S. and Canada. “So much of this is really about the ad tech build out, and that’s not Peter's skill set,” said the second buyer. “Peter’s really good at selling sponsorships and really good at building relationships—I would not call him an ad tech guy. So my guess is they probably want to make way for someone that knows how to build an ad tech team.” Need for speed Speed seems to be the name of Netflix’s game moving forward, and media buyers told Ad Age the streamer’s ad efforts until now have been anything but quick. Some advertisers have found Netflix’s premium sales pitch lacking, offered a blend of integrations into its shows, and even out-of-home experiential activations that have nothing to do with video inventory. “They went big on packages this year, like experiential packages with their Netflix House, and off network-advertising,” said a fourth media buyer. “By off-network I mean, it’s not even on the platform. They’re not that functional yet.” Plus, when it comes to planning deep brand integrations with shows, Netflix lags rivals that have been doing product placement and other such collaborations for far longer, this person said. “What Netflix can offer just doesn’t have the scale, and they’re still asking for 12 to 18 months of lead times on direct content integration deals,” this person said. “If you look at the budget cycle for advertisers … they’re just kind of misaligned with advertisers right now from that perspective, but they’ll get better.” The second buyer agreed that Netflix’s ad deals so far have been moving slowly and that clients are far more interested in developing bespoke plans to integrate into content or sponsor its live events than buying 30-second unit inventory. “30-second spots on Netflix—that’s not the hard part,” said the buyer. “The sponsorship pieces and working with [advertisers] on scripted content—that’s what I find the most interesting at Netflix, but they have had a hell of a time articulating those and how and when you engage with them on it. It’s a long conversation. It’s not one conversation. It’s a lot of meetings.” Netflix’s announcement that it would air Christmas Day NFL games for the next three years also seemed like a surefire way to bump its ad business, but sales for the games haven’t been going to plan, according to three sources with knowledge of the deals. A Netflix spokesperson told Ad Age there is no correlation between Naylor’s departure and ongoing NFL negotiations, and that Netflix is “seeing positive momentum with the packages currently in the marketplace.” The third media buyer said Netflix’s NFL ad inventory was significantly overpriced, and rates have been forced to come down as some clients have passed on it. Netflix’s initial ask for the matches was greater than $800,000 for a 30-second unit, Ad Age previously reported, with larger sponsorships requiring packages in the range of $6 million. A fifth media buyer said the pitch was not well-received by clients. This agency had two brands considering jumping into Netflix’s football deal, but ultimately balked, partly because brands were reluctant to take away from their NBA commitments (NBA has traditionally dominated the holiday). Netflix has since come down on its ask for Christmas football after meeting resistance, the fourth buyer also confirmed, adding it still has inventory available. “The NFL struggles don’t surprise me based on where the Netflix NFL negotiations have progressed—which is essentially nowhere,” said a sixth buyer, adding that pricing had been reduced by over $100,000 the last time they discussed the deal with Netflix. “But that simply isn’t enough … Christmas Day is not a must-buy for anyone. I’ve heard from a number of colleagues that their deals aren’t completed, which leads me to believe they don’t have much done.”

Inside the state of Netflix’s ad sales—media execs react to Peter Naylor’s exit

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