Disney turns to AI for personalized ads amid dwindling Cable TV figures

Entertainment giant Disney has unveiled a new tool on its streaming platforms to assist advertisers in making personalized ads to match specific movie scenes.

The tool relies on artificial intelligence (AI) to create contextual advertisements for improved conversion rates. Called “Disney’s Magic Words,” the AI-powered tool is expected to see action on Disney+ and Hulu, allowing advertisers to tailor their commercials to match the mood of movie scenes.

A closer look at the internal workings of the AI tool reveals a reliance on metadata, serving as descriptive tags for specific scenes. The intuitive design of the tools allows advertisers to simply tag scenes and include personalized commercials where necessary to resonate “with concepts that the viewers experience.”

Six advertisers are testing the new AI-powered service, including Horizon Media and GroupM. Other leading brands involved in the beta testing include IPG Mediabrands, Publicis Media, Omnicom, and Dentsu.

“What that means is leaving broad demos (demographics) behind and buying specific audiences,” said Omnicom’s CIO Geoffrey Calabrese. “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.”

Disney says the new feature will be game-changing for brands seeking to improve the impact of their advertising while saving a fortune on fees. The company has invested significantly in revolutionizing the state of ads on its streaming platform amid a decline in traditional television viewership.

Advertisement revenue slumped by 3% at the tail end of 2023, forcing the company to explore new methods powered by emerging technologies. Disney CEO Bob Iger confirmed the wholesale embrace of technology in its attempt to revolutionize advertising on its platform.

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

Since Disney+ rolled out its ad-supported version, nearly 1,000 brands have signed up on the platform in Q1 of 2024, with the company bracing to onboard more advertisers in the coming months.

AI-powered advertisements reign supreme
As generative AI continues its climb in the mainstream arena, several companies are finding new use cases for the offering in advertising. Meta (NASDAQ: META) and Google (NASDAQ: GOOGL) have since released tools to assist advertisers on their platforms to make personalized ads in record time with the push of a few buttons.

Despite the warm embrace, the platforms are rolling out guardrails to ensure the safe usage of the offerings, including an express ban on political advertisers by Meta. Rather than backing an express ban, Google is pitching its tent with clear labeling of political advertisements to stifle deepfakes.

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