((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Added names of advertising companies participating in beta testing in paragraph 5) by Dawn Chmielewski
Walt Disney DIS.N uses artificial intelligence to develop a new advertising tool that will help brands adapt their advertisements to the atmosphere of certain scenes in a film or television series.
Called “Disney’s Magic Words,” this 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 label scenes in its library, identifying content, brands, images and mood.
Brands can use these descriptive labels, known as metadata, to identify a specific scene or mood and personalize their message accordingly.
“What that means is you have to leave aside broad demographics and buy specific audiences,” said Geoffrey Calabrese, chief investment officer of Omnicom Media Group. “These magic words will literally allow me to connect to the emotions of the consumer, at the audience level. And for us, that’s a real game changer.”
Omnicom is one of six global advertising companies participating in an early beta test of the advertising product, Disney told Reuters. Other partners are Dentsu 4324.T, GroupM, Horizon Media, IPG Mediabrands and Publicis Media PUBP.PA. The company announced the new advertising features last month, during a presentation at the Consumer Electronics Show in Las Vegas.
Rita Ferro, Disney’s global head of advertising sales, said the feature allows advertisers to maximize the impact of their messages “because it resonates with the concepts viewers experience.”
Disney’s investment in streaming advertising technology comes as advertisers, like viewers, are turning away from broadcast and cable television. The company’s advertising revenue fell nearly 3% in the first quarter of fiscal 2024 to $3.35 billion, according to LSEG, reflecting declining traditional television audiences. Research firm eMarketer estimated that Disney+ accounted for about $790 million in revenue last year.
Disney does not disclose its advertising revenue.
Chief Executive Bob Iger told investors during the company’s quarterly conference call Wednesday that the ad-supported version of the Disney+ service attracted more than 1,000 advertisers in the first quarter, ten times more than at the time of launch.
the company also told Reuters: “Our revolutionary approach to technology ensures that our entire streaming portfolio will be the ultimate destination for brands in the years to come.”
Half of consumers who sign up for Disney+ opt for the cheapest version of the service, which includes advertising, said Joe Earley, president of Disney’s direct-to-consumer business. He added that the company has spent years refining advertising technology designed specifically for streaming. Its Hulu service launched in 2008 as a free, ad-supported service.
“Disney+ hasn’t had to adapt,” Mr. Earley said. Disney+ didn’t have to adapt,” Mr. Earley said, “it hit the ground running.”