Disney uses AI to help brands create game-changing personalized ads

Entertainment giant Disney has unveiled a new AI-powered tool on its streaming platforms to help advertisers make personalized commercials that match specific scenes in movies and shows.

The tool, called “Disney’s Magic Words,” is expected to be rolled out on Disney+ and Hulu. It creates contextual advertisements for improved conversion rates – a combination of AI and machine learning analyzes and tags scenes across Disney’s library, identifying the contents, brands, images, and mood.

According to Reuters, brands can then use these descriptive tags, known as metadata, to identify a specific scene or mood and then personalize messaging to match. Unsurprisingly, advertising companies are very excited.

"What that means is leaving broad demos behind and buying specific audiences," said Geoffrey Calabrese, Omnicom Media Group's chief investment officer.

"These magic words are literally going to be able to connect me to the emotions of the consumer, at an audience level. And for us, that's really a game changer."

Advertisers obviously see the new feature as a way to both improve the impact of their commercials and save a lot of money on fees. Besides, it allows them to move away from declining broadcast and cable TV markets with a lighter heart.

Omnicom is one of six global advertising companies taking part in an early beta test of the advertising product, Disney told Reuters. The other beta partners are Dentsu, GroupM, Horizon Media, IPG Mediabrands, and Publicis Media.

Disney is investing heavily in ads on its streaming platform. Since one of them, Disney+, rolled out its ad-based tier, nearly 1,000 brands have signed up on the platform in Q1 of 2024.

Another piece of good news for the platforms and advertisers is that commercial breaks on streaming services are apparently not that annoying, at least to American consumers.

New research has shown that users are increasingly opting for ads in exchange for savings on their subscription costs. Netflix posted a massive increase in subscriber numbers during its last quarter of 2023 as its ad tier attracted more subscribers looking for a cheaper alternative.

Disney’s position is also great. According to Joe Earley, president of Disney’s direct-to-consumer business, half of consumers who sign up for Disney+ opt for the ad-based version.

Besides, Disney’s Hulu platform was originally launched as a free, ad-supported service back in 2008, so the company has years of experience in refining ad technology in streaming.