How Netflix's WBD Merger Could Redefine the Battle for Streaming Ad Dollars

Last week, Warner Bros. Discovery accepted a bid from Netflix for an $83 billion merger, sparking chaos across the entertainment industry. On Monday, Paramount launched a hostile takeover bid for the whole company, with a deal reportedly valued at $108 billion; entertainment unions and high-profile figures have denounced the transaction amid fears of a streaming monopoly; and consumers are bracing for the potential impact on their wallets. Industry experts told ADWEEK they believe Netflix's WBD acquisition is far from a done deal; the transaction needs to pass regulatory approval in the U.S. and Europe, and it's not expected to close for 12-18 months. However, if it does go through, it could be a major advertising advantage for the streamer—or whatever company gets WBD. Netflix is the largest streamer in the industry, with more than 300 million subscribers. By adding WBD assets, including HBO Max, Netflix could add 128 million more subscribers to its arsenal. The combination would eventually create a single point of entry for that diverse audience, as well as Netflix's new IP, including Harry Potter, Friends, Game of Thrones, and more. According to Madison and Wall, the deal would allow Netflix to capture a larger part of the more than $60 billion U.S. TV ad market, partly because HBO Max is under-monetized, it said. A deal would also create new subscription bundles for its ad tiers. A stronger full-funnel ad biz In May, Amy Reinhard, Netflix’s ad president, told ADWEEK that the streamer’s biggest request from clients is to get closer to its content. In response, it's been implementing AI to put advertisers within the worlds of its shows. Notably, WBD also has its Storyverse ad offering, which allows brands to tap into its more nostalgic IP, such as When Harry Met Sally, The Big Bang Theory, or Friends. Combining these capabilities and assets, Netflix could bring the worlds of Harry Potter and Game of Thrones to its brand integrations. One ad buyer from a holding company, speaking anonymously, said both Netflix and HBO Max are known for their high-touch sponsor integrations that go beyond "just spots and dots for reach." "There are platforms that are known for reach, and there are platforms that are known for highly engaged content and doing things in a unique way. Netflix and HBO Max are very similar in a sense of having highly engaged content. When we work with them, we're leaning into that content," they said. Another media buyer, also speaking anonymously, said they were "excited" to see how Netflix's AI-informed contextual creative "navigates and translates on HBO Max." But it's not just brand integrations that will get a boost. Experts told ADWEEK that Netflix's adtech would improve what advertisers can do across WBD properties. "Netflix adtech isn’t reliant on pixels, and they have been aggressively building their audience device graphs, which will ultimately improve our ability to audience target across WBD streaming properties," the second buyer said. The first buyer, however, noted that Netflix doesn't offer buy-side targeting, whereas HBO Max offered limited data for programmatic buys. "We've seen some really impressive ad innovation and tech coming from Netflix based on their ability to make recommendations on what content to watch using their IP and creative," they said. "If they can take that and replicate it on Max, that would be beneficial." Upfront might If the deal goes through, industry experts predict Netflix will put itself in a prime position for the upfront in the future. "Much like the consolidation on the ad side that we see with Omnicom and IPG coming together, it creates this huge scaled entity that brings a lot of simplicity and acceleration to the marketplace in some ways," a senior sales-side executive said on the condition of anonymity. "Regardless of where WBD lands, whoever winds up with it is going to jump the line." Owning WBD would give Netflix or another buyer pull in upfront decision-making, too. For instance, Nielsen rolled out its panel + big data currency for the last upfront, which led to delays and disruptions as companies adapted. Whatever company buys WBD could have more pull in how ad industry disruptions like that are handled. Buyers previously told ADWEEK that Warner Bros. Discovery's upfront was a mess in the first year of its $43 billion 2022 merger, with the deal finalizing weeks before presentations. With WBD's plan to spin off its cable networks, it was already primed to disrupt this year's event again, with Discovery Global hosting its "inaugural" upfront in 2026 while also presenting Warner Bros. ad inventory. However, when it comes to Netflix's deal with WBD, ad buyers and sellers told ADWEEK there shouldn't be any upfront impact for the upcoming year as the regulatory process shakes out. Even so, many are already scenario planning: "We have to build in protections for our clients. If we bought something and it was guaranteed, we need to make sure we keep it," the first buyer said. Another aspect to consider is the ad industry's move toward programmatic buying, which could shield buyers from any M&A aftereffects. After all, with more inventory moving programmatically through The Trade Desk and Amazon DSP, buyers are less frequently buying directly from publishers. Time will tell whether Netflix lands WBD or if a competitor, such as Paramount, can swoop in. But as more ad buying becomes automated, advertisers might not care who ultimately winds up with the company.

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