Disney's "Magic Words" – New AI Tool Serves Ads Based on Content Scene and Mood

Disney is revamping its advertising strategy for streaming services Disney+ and Hulu by introducing an AI-powered ad delivery tool called "Magic Words." The tool utilizes AI and machine learning to analyze scenes, identifying content, brands, images, and moods within Disney's extensive library.

The Magic Words tool enables brands to leverage descriptive metadata for personalized messaging based on the context of specific scenes or themes in movies or TV shows. This approach goes beyond traditional demographics, allowing advertisers to connect with viewers on a deeper emotional level.

AI-led advertising

Disney has initiated beta testing with six prominent global advertising firms, including Dentsu, Omnicom, Horizon Media, GroupM, IPG Mediabrands, and Publicis Media. The collaboration aims to refine contextual advertising through AI-driven insights, enhancing the impact of advertisements and increasing viewer engagement.

"What that means is leaving broad demos (demographics) 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."

Rita Ferro, Disney's global Head of Ad Sales, emphasizes the tool's ability to maximize advertisement impact by aligning with viewer experiences and emotions. This move reflects Disney's commitment to adapting to evolving consumer preferences in the streaming era.

As advertisers increasingly shift away from traditional broadcast and cable TV, Disney's investment in streaming ad technology demonstrates its interest in streaming ad experiences. With Disney+ attracting over 1,000 advertisers in its first quarter, CEO Bob Iger affirms the company's proactive approach to meeting the demands of advertisers and viewers.

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

In Q1 of fiscal year 2024, the company experienced a nearly 3% decline in advertising revenue, amounting to $3.35 billion, as reported by LSEG. This dip is attributed to diminishing viewership in traditional TV platforms. According to research conducted by eMarketer, Disney+ contributed approximately US$ 790 million to the company's revenue in the previous year.