April 16, 2024

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Entertainment giant Walt Disney is tapping the power of artificial intelligence to launch a new advertising tool targeting brands airing commercials on streaming platforms.

The new AI-powered advertising tool known as “Disney’s Magic Words” will ensure that brands can customize their commercials to meet the mood of scenes within a movie or TV series.

The new tool will streamline advertisements on Disney+ and Hulu. It will integrate AI technology and machine learning to analyze and tag scenes on its library. The tool can also be used to identify images, contents, brands and mood.

The AI-powered advertising tool will ensure that the ads aired on Disney+ and Hulu match the mood and content of movies and TV shows.

Brands will use descriptive tags or metadata to customize their ads. They can then identify a scene or a particular mood in a movie or TV show and personalize their ad messages so that it matches it.

Disney has already selected six global advertising firms to participate in an early beta test for the advertising product. These firms are Omnicom, Dentsu, GroupM, IPG Media brands, Publicis Media and Horizon Media.

While speaking to Reuters, an executive from Omnicom opined the new tool will transform advertising. It will ensure that broad demographics are left behind and brands will work with specific audiences by personalizing their messages.

“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,” he said.

While speaking at the launch of the new ads feature last month, Disney’s global head of ad sales, Rita Ferro, said this tool will ensure advertisers maximize the impact of their messages. The feature will resonate with what the viewers experience while watching movies and TV shows, which will also increase the conversion rates.

Growing Interest in Advertisements

Streaming platforms are turning towards advertisements to increase their revenue base and grow profits. 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.

The investments done by streaming platforms into advertisements comes as advertisers target the growing number of streaming content consumers. Advertisements on streaming platforms are growing while those on broadcast and cable TV have declined.

Disney is now looking to secure a significant percentage of the advertising revenue going into streaming platforms. In its first quarter 2024 results, Disney posted a nearly 3% drop in advertising revenue to hit $3.35 billion. The decline shows declining interest in traditional TV viewers.

Disney+ Ad Numbers Are Positive

The Disney+ streaming platform is posting solid numbers. Last year, this platform accounted for around $790 million of the company’s revenues.

While speaking at the quarterly investor call last week, Disney’s CEO, Bob Iger noted that the ad-tier of Disney+ amassed over 1,000 advertisers during the first quarter. The numbers point towards a tenfold increase since launch.

Iger also noted that Disney was using revolutionary technology to grow its streaming platform. The executive hopes that the streaming portfolio will become a leading destination for many brands in the years to come.

The majority of those subscribing to Disney+ are doing so because it is a less-costly version. The same tactic was used by Netflix after releasing a lower-priced ad-tier.

It is not the first time that Disney is testing out new offerings by redefining advertisements. In 2008, the company launched Hulu as a free streaming platform powered by ads. The service has since grown to become among the largest streaming platforms.


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