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Future of TV CTV Media Planning and Buying

Disney+ now has ads: here’s what brands need to know

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By Hannah Bowler, Senior reporter

December 7, 2022 | 5 min read

Disney+ has launched its ad tier globally, it is a huge move that changes the face of CTV. Here's why.

Disney+ launches its ad-funded tier

Disney+ launches its ad-funded tier / Disney

Disney+’s $8 per month ad-supported tier lands today (December 8) a month after Netflix launched Basic with Ads for a cheaper $6.99 a month. The streamers are truly embracing ads.

Disney is one of the last major streamers to roll out an ad-funded plan, but it does so with a significant head start on competitors having invested in adtech for years, and boasting ad-funded Hulu in its arsenal. Furthermore, it is the only US streamer that has built its own ad server. Disney is believed to be asking for $50 CPM and a $2m commitment just below the $65 CPM Netflix is charging.

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Disney walked away from the 2022 Upfronts with a record-breaking $9bn in advertiser commitments after announcing its streaming inventory would be up for grabs. It was a much-anticipated property.

As for how it will look to users, the ad load will be low with an average of four minutes per hour below its broadcast channels which would typically carry up to six minutes per hour and in line with Netflix. That’s fewer ads than NBCU-owned Peacock, which runs five minutes of ads for every hour, and Disney-controlled Hulu, which runs between nine to 12 ads in an hour.

It’s also known that Disney will be blocking ads on children’s profiles and will ban ads related to alcohol or politics.

The company's sales house, Disney Advertising, is tasked with selling inventory to its streamer. Across its network, Disney Advertising offers over 1,800 audience segments built from 100,000 attributes. On the measurement front, Disney can track brand lift, attribution based on KPIs, social, valuation and audience verification. It also runs a self-serve platform and has a programmatic marketplace.

Chief executive officer and co-founder of IRIS.TV, Field Garthwaite, says Disney will need to introduce capabilities that improve ad relevance and brand suitability to meet advertisers’ expectations.

"Incorporating video-level content data into its advertising solution will help Disney increase the value of its new ad-supported options while minimizing the risk of bad viewing experiences and brand sentiment by eliminating any ad placements in unsuitable environments," Garthwaite says.

Matt Spiegel who is executive vice president, media and entertainment at TransUnion, says just because Netflix has garnered more industry attention with its launch doesn’t mean marketers are less excited about Disney’s ad tier.

"It’s difficult to compare the two since Disney+ is more of an add-on strategy and the market expects more out of Netflix following its long stance of remaining ad-free,” he says.

Although it's largely business as usual for Disney, Spiegel says, this shouldn’t “underscore” the importance of the launch. Instead, he says it “highlights Disney’s commitment to reinventing the TV business model and bringing together a full portfolio of their solutions, into the ad-supported streaming ecosystem.”

Elsewhere, Disney is also reported to be mulling a membership program akin to Amazon Prime that would offer discounts to its theme parks and to merchandise tied to its Disney+ streaming service. Although details are sparse, Disney’s chief executive officer Bob Chapek has been vocal about wanting to cross-sell across the Disney portfolio.

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