Amid declining cable TV numbers, Disney turns to AI for personalized advertising.
Entertainment giant Disney (NASDAQ: DIS) has unveiled a new tool on its streaming platform that will allow advertisers to create customized ads tailored to specific movie scenes.
This tool uses artificial intelligence (AI) to create contextual ads to improve conversion rates. Dubbed “Disney’s Magic Words,” the AI-based tool is expected to run on Disney+ and Hulu and will allow advertisers to tailor ads to match the mood of movie scenes.
A closer look at the inner workings of AI tools reveals their reliance on metadata that serves as descriptive tags for specific scenes. The tool’s intuitive design allows advertisers to tag scenes and, if necessary, include personalized ads that resonate with “the concept the viewer is experiencing.”
Six advertisers are testing the new AI-based service, including Horizon Media and GroupM. Other major brands participating in the beta test include IPG Mediabrands, Publicis Media, Omnicom, and Dentsu.
“This means leaving broad demographics behind and buying into specific audiences,” said Geoffrey Calabrese, CIO at Omnicom. “These magic words will literally connect me to the emotions of consumers at an audience level. And for us, this is truly a game changer.”
Disney says this new feature will be a game-changer for brands looking to improve advertising effectiveness while saving on fees. The company has been investing significantly in transforming the advertising landscape on streaming platforms amid declining traditional TV viewership.
Advertising revenue fell 3% at the end of 2023, forcing the company to look for new ways to build on new technologies. Disney CEO Bob Iger has confirmed that the company has embraced technology in a big way to try to revolutionize advertising on its platform.
“Our innovative approach to technology ensures that our entire streaming portfolio will be the ultimate destination for brands for years to come,” Iger said.
Since Disney+ launched its ad-supported version, nearly 1,000 brands have signed up for the platform in the first quarter of 2024, and the company is poised to attract more advertisers in the coming months.
AI-powered advertising reigns supreme
As generative AI continues to rise in the mainstream, several companies are finding new use cases for this product in advertising. Since then, Meta (NASDAQ: META) and Google (NASDAQ: GOOGL) have launched tools to help advertisers on their platforms create personalized ads in record time with the push of a few buttons.
Despite the warm embrace, the platform is rolling out guardrails to ensure safe use of its products, including an explicit ban on political advertisers on Meta. Instead of supporting an explicit ban, Google is pitching a tent with clear labeling of political ads to curb deepfakes.
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