Disney+ has the power to ‘determine the future’ of streaming ads... and it just did

Disney+’s ad-supported tier goes live later this year and will join the likes of ad-supported services Peacock, Discovery+ and HBO Max and pre-date an ad-funded Netflix, which is set to roll out in a year’s time. “Introducing ads on streaming services represents a huge change in how audiences experience TV and film,” says Ryan Cook, managing director of Criteo. “Any apprehension among consumers now for the introduction of ads may yet prove short-lived should the balance be struck just right.”

Cook says Disney now has the opportunity to “determine the future of ad loads with frequency, scale and testing different ad formats (one upfront longer ad, shoppable ads, click and save ads).”

Early indications from Disney’s ad plans suggest the balance might be struck, with reports that it will run ads for four minutes on movies or shows that last an hour or less. That’s fewer ads than NBCU-owned Peacock, which runs five minutes of ads for every hour, and Disney-owned Hulu, which runs between nine to 12 ads in an hour.

“Disney’s tailored model means audiences won’t be forced to sit through minutes of irrelevant content,” Cook says. “Offering access to more premium or original content in exchange for the presence of ads may offer users the right level of choice.”

Matt Spiegel, executive vice-president of media and entertainment vertical at TransUnion, says Disney’s ad-light loads are a “recognition of how much work there is still needed to do on evolving the types of ads sold.” He says the fact that “we are still talking about the ad-load of 15s, 30s, means we have yet to find another model that is meaningfully supplemental to that ad unit.”

Disney has the potential to increase the value of targeted advertising so that consumers help brands generate more revenue on fewer and targeted ad exposures, Spiegel says. Cook adds that ads on streamers will have to be “smarter and this will require new kinds of collaborations between brands and streaming providers to ensure sufficient relevance to both audience interests and the choice of program.”

Disney has a head start on its competitors, having invested in adtech for years, and has Hulu in its arsenal – the only US streamer that has built its own ad server. Tal Chalozin, chief technology officer and co-founder at Innovid, says Disney is unique with its “homegrown technology that gives them a leg up on competitors.”

Chalozin previously weighed in on what ads could look like on Netflix, telling The Drum he expects Netflix to take a behavior-targeting approach to ads and not a profile-based approach. On Disney he says it will be not pulling the same ad playbook as others. “My bet is that Disney will invest in more than just limiting the ad verticals and lower the ad-load. They will do something much more magical.”

Chalozin predicts that Disney will leverage fan favorites and find a “super-sized sponsor,” and place ‘this show is brought to you by...’ around an existing piece of content.

Details about Disney+’s ad strategy comes after the streamer gained 7.9 million subscribers during the last quarter, bringing its tally to 137.7 million subscribers.

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