Walt Disney is making use of artificial intelligence to power a new advertising tool, enabling brands to tailor their commercials to fit the mood of specific scenes within a movie or television series.

"Disney's Magic Words" as a tool introduces a new form of contextual advertising for the Disney+ and Hulu streaming services. 

By using a combination of AI and machine learning, the ad tool analyses and tags scenes across its library, thereby identifying the contents, brands, images and mood.

Brands can harness these descriptive tags, known as metadata, to identify a specific scene or mood, after which they can personalise the messaging to match.

"What that means is leaving broad demos (demographics) behind and buying specific audiences," Geoffrey Calabrese, Omnicom Media Group's chief investment officer said.

 "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."

Omnicom is among the six global advertising companies who are part of an initial beta test of this advertising product, Disney said.

Other beta partners include Dentsu, GroupM, Horizon Media, IPG Mediabrands and Publicis Media.
The new ad features were announced last month during the Consumer Electronics Show in Las Vegas.

Rita Ferro, Disney's global head of ad sales, said the feature allows advertisers to maximise the impact of their messages "because it resonates with concepts that the viewers experience."

The investment in streaming ad technology comes on the backdrop of advertisers moving away from broadcast and cable TV, as more and more viewers opt for streaming. 

Advertising revenue for Disney was down about 3 per cent in its fiscal 2024 first quarter to $3.35 billion, according to LSEG, which reflects a decline in traditional TV viewership.

Researcher eMarketer estimated Disney+ accounted for about $790 million in revenue last year.

Disney does not report its advertising revenue.

The company's CEO Bob Iger told investors during Disney's quarterly investor call on Wednesday that the ad-supported version of the Disney+ service has attracted over 1,000 advertisers in the first quarter, which is a tenfold increase from its launch.

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

Half of consumers who sign up for Disney+ opt for the less-expensive version of the service, which includes advertising, said Joe Earley, president of Disney's direct-to-consumer business. He said the company has spent years refining ad technology that has been designed specifically for streaming. Its Hulu service launched as a free, advertising-supported service in 2008.

"Disney+ didn't have to ramp up," Earley said. "It hit the ground running."

(With Reuters Inputs)