LONDON, UK — A year after it launched an ad-supported tier for Disney+, Disney Advertising will use CES to showcase new ad formats including gamification, shoppability and social integration.

The appearance at January’s tech show in Las Vegas will essentially fire the starting gun on the narrative Disney+ will use to tell its advertising story at the May TV ad sales upfronts season.

Rita Ferro, President, Disney Advertising, talked about Disney+’s progress and strategy with Justin Lebbon at The Future Of Television Advertising Global conference in London on December 6. This video was produced on stage at the conference. Beet.TV is publishing  it courtesy of Adwanted Events.

An Early Start For Upfronts

“In Las Vegas, we’re going to do our tech and data showcase live at CES,” Ferro said. Previously, the presentation was done remotely.

“So we do everything tech and data in January because all of that that we roll out as part of what will ultimately be an upfront conversation needs to be put into the planning process.” That doesn’t just include buying plans but also tech and measurement needs, requests for which can be brought to market at the upfronts.

Ferro said the traditional spring-time season when TV companies tout their upcoming offering to secure upfront ad deals remains valuable but is no longer the sole such moment in the year – now the upfronts is part of a process.

“It’s not only that May show,” she said. “There’s a lot more that happens. It’s helpful, though, from a overall business (perspective), just in terms of anchoring and getting people focused. But it’s a lot of work.”

Tech Tricks On Show

Disney’s CES tech showcase will contain previews of new ad formats coming to the platform in 2024.

“They’ll be around gamification, around shopification, around how social gets integrated into a broader user experience,” Ferro said.

“We know that, when people are streaming, most of that is happening on the big screen – it is television with more bells and whistles, as I like to say. And so what are those experiences that enhance that? Whether it’s how they purchase, how they interact and have social conversation, community watching, et cetera. So more to come on that, but those are the areas.”

Experience Creates Engagement

Ferro was speaking a year after Disney+ launched its ad-supported tier.

She said: It’s going extraordinarily well. We have a thousand advertisers today. … Fifty percent of the (US) customers who sign up for Disney+ now are signing up for the ad tier.”

Ferro said Disney was “thoughtful” and “careful” about its ad tier launch, taking pains to get the experience right. Whereas rivals declared they would launch advertising but lacked an ad-tech stack, “We had Hulu for 15 years prior and we understood audience adoption of an ad supported tier.”

That means, for example, ads per brand are capped at two per day, 12 per week. And Ferro likes the results: “From March to September, engagement on the ad tier grew 35%.”

Consolidation Is Coming

Disney’s new ad offering allows ad buyers to target 2,000 audience segments, but 150 main ones, across Disney+, Hulu and ESPN via streaming TV.

But Ferro isn’t throwing out linear just yet – it remains 50% of the company’s revenue.

“When I look at our linear businesses, average age is somewhere between 50 and 60,” she said. “For the same show when it’s on a Hulu or Disney+ platform, it’s like 25 to 35. So that opportunity is about incremental reach and that is what advertisers are looking for.”

Ferro is now seeing the emergence of new FAST TV platforms vying for a slice of the CTV ad market.

“Ultimately, you’re going to see consolidation because there’s no way that all of these players can continue to exist without multiple revenue streams,” she said. “So I do think that you’re going to start to see that (consolidation) in the next 12 to 24 months, pretty aggressively.”

Opening Up To Buying

For its part, Disney+ wants to remain open. While some platforms limit data access like a walled garden, Ferro sees Disney+ as “more like a hedged garden”.

“We have our own tech stack, but we are totally interoperable with 30 DSPs in the market with all of our measurement partners, with all of our clean rooms,” she said. “We have 140 clean rooms set up across the marketplace, whether direct or through agencies.

“And so we’ve created the environment to allow people to buy however they want. And if that means buy directly with Disney, great. And if that means buy through one of our DSP partnerships because that’s the way they want to buy, great.”

You’re watching Beet.TV coverage of The Future of TV Advertising Global 2023, presented by Index Exchange. For more videos from this series, please visit this page.