Disney is using new AI-supported advertising tools for Disney+, Hulu ads

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Walt Disney is using artificial intelligence to power a new advertising tool that will help brands tailor their ads to suit the mood of specific scenes from a movie or television series.

Called “Disney's Magic Words,” the tool introduces a new form of contextual advertising for the Disney+ and Hulu streaming services. It uses a combination of AI and machine learning to analyze and tag scenes in its library, identifying content, brands, images and mood.

Brands can use these descriptive tags, known as metadata, to identify a specific scene or mood and then personalize messaging to match.

“It means going beyond broad demos (demographics) and buying specific audiences,” said Jeffrey Calabrese, chief investment officer of Omnicom Media Group. “These magic words will really enable me to connect with consumer emotions on an audience level. And for us, that's really a game changer.”

Disney told Reuters that Omnicom is one of six global advertising companies participating in the early beta testing of this advertising product. Other beta partners are Dentsu, GroupM, Horizon Media, IPG MediaBrands and Publicis Media. The company announced the new advertising features at a showcase at the Consumer Electronics Show in Las Vegas last month.

Rita Ferro, Disney's global head of ad sales, said the feature allows advertisers to maximize the impact of their messages “because it resonates with the concepts the audience experiences.”

Disney's investment in streaming advertising technology comes as audiences as well as advertisers are moving away from broadcast and cable TV. According to LSEG, the company's advertising revenue fell nearly 3 percent to $3.35 billion (roughly Rs. 29,100 crore) in the first quarter of fiscal 2024, reflecting a decline in traditional TV viewership. Researcher eMarketer estimates Disney+'s revenue last year to be around $790 million (roughly Rs. 6,600 crore).

Disney does not report its advertising revenue.

CEO Bob Iger told investors during the company's quarterly investor call on Wednesday that the ad-supported version of the Disney+ service has attracted more than 1,000 advertisers in the first quarter, ten times more than at launch.

“Our revolutionary approach to technology ensures that our entire streaming portfolio will be the ultimate destination for brands for years to come,” Iger said in a statement to Reuters.

Joe Early, president of Disney's direct-to-consumer business, said half of consumers who sign up for Disney+ choose the less-expensive version of the service, which also includes advertising. He said the company has spent years refining ad technology specifically designed for streaming. Its Hulu service was launched in 2008 as a free, advertising-supported service.

“Disney+ didn't need to move forward,” Early said. “It hit the ground.”

© Thomson Reuters 2024


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