Disney Tests AI Tool That Matches Commercials to Appropriate Content

Disney is beta testing a new advertising tool for its streaming services that matches commercials with appropriate scenes in movies or shows.

Dubbed “magic words,” this tool uses artificial intelligence and machine learning to analyze and tag scenes within Disney’s library of movies and television series, Reuters reported Friday (Feb. 9).

By analyzing and tagging scenes, Disney’s magic words tool identifies the contents, brands, images and mood within each scene, according to the report. This information is then used as metadata that brands can leverage to personalize their messaging.

With this new form of contextual advertising for its Disney+ and Hulu streaming services, advertisers can connect with the emotions of consumers, moving away from broad demographics and buying specific audiences, the report said.

Disney has partnered with six global advertising companies to beta test this new advertising product, per the report. The company aims to maximize the impact of advertisements by resonating with the concepts that viewers experience.

Disney’s investment in streaming ad technology is timely, as advertisers are increasingly moving away from traditional broadcast and cable TV, according to the report. The company’s advertising revenue fell nearly 3% in its fiscal 2024 first quarter, reflecting declines in traditional TV viewership.

In contrast, the ad-supported version of the Disney+ streaming service has attracted more than 1,000 advertisers in the first quarter alone, the report said.

This tenfold increase from its launch has been aided by Disney’s years of refining ad technology specifically designed for streaming, per the report. Disney’s Hulu streaming service, which was launched in 2008 as a free, ad-supported service, has played a role in this process.

The news comes about a month after it was reported that another provider of streaming services, Amazon, could realize nearly $5 billion in yearly revenue from its video advertising efforts.

Most of that money would come from the tech giant’s decision, announced in December, to add commercials to its Prime Video movies and TV shows for its users in North America — and offer the option to pay another $3 a month for the ability to watch movies and shows without ads.

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