Disney Introduces 'AI Magic' to Innovate Advertising on Disney+ and Hulu

The Walt Disney Company (DIS) is integrating artificial intelligence to create an advanced advertising model called 'Disney's Magic Words' for its streaming platforms Disney+ and Hulu. This sophisticated tool is designed to revolutionize how digital ads work by using AI and machine learning to dissect and understand scenes within content. As it meticulously tags them with relevant metadata, it opens a door for advertisers to customize their commercials in alignment with the corresponding moods or specific scenes of the stream.

Partnership with Advertising Titans

Major global advertising firms are already on board, testing this innovative system in its early stages. These include prominent names like Omnicom, Dentsu, GroupM, Horizon Media, IPG Mediabrands, and Publicis Media.

Addressing Declines in Traditional Advertising Revenue

During its fiscal 2024's first quarter, Disney saw a 3% drop in its ad revenue, which reduced to $3.35 billion. This decline reflects an industry-wide trend where traditional TV advertising is losing its previous dominance as viewership patterns change. Notably, Disney+ alone brought in an estimated $790 million in revenue last year.

Disney's shift towards enhancing streaming ad technologies comes as a strategic move in response to the industry-wide pivot from traditional TV. It's a clear attempt to secure its position in the rapidly evolving digital advertising landscape.

Disney's AI Task Force and Workforce Expansion

In 2023, Disney began assembling a specialized task force aimed at exploring AI's vast potentials across its entertainment empire. The company also listed multiple job openings seeking AI or machine learning specialists across several divisions. These roles were spread across the Walt Disney Studios, theme parks, Disney Imagineering, Disney-branded television, and the advertising team.

Financial Performance and Investments

Disney reported a first-quarter revenue of $23.5 billion, which was constant as compared to the same period in the previous year but fell short of the expected $23.6 billion. However, the adjusted EPS of $1.22 exceeded expectations. In a separate finance-related development, Disney announced a significant $1.5 billion investment in Epic Games.

It's notable that the recent advancements and financial moves by Disney are underscored by a combination of innovative strategies and calculated investments, aimed at fortifying its position in the changing landscapes of entertainment and advertising.

Disney, Advertising, AI