Disney plans to extend Hulu’s ad targeting options to Disney+’s ad tier

Asked what specific ad targeting capabilities from Hulu will be ported to Disney+, Ferro said, “it’ll be some of the basic stuff: age, gender, some geo-targeting. And then the full suite of targeting in July.” That expanded targeting suite will include the 2,000 audience segments available through the Disney Select first-party data platform — which spans 235 million monthly unique visitors in the U.S. to Disney’s media properties and more than 100 million U.S. household-level IDs, she added.

“The targeting thing is probably big for them because they can better monetize the inventory as opposed to us just buying P2+ [the broad audience segment of anyone two years old and older] and there’s so much waste. Now they can make it more valuable. So that will definitely help. It’s important for us to have the same capabilities on Disney+ that we’re now accustomed to on most of the other streamers,” said an agency executive.

The extension of Hulu’s ad products and services to Disney+ is the latest showing of Disney’s push to unify its back-end ad tech operation as the company seeks to automate 50% of its ad sales — a goal that Ferro said Disney is on pace to reach this year. “We’re at 35% right now, and that’s before the full integration of all of these [ad products and services from Hulu],” she said.

Underpinning Disney’s streaming ad tech expansion is the Disney Ad Server, which stems from the company taking full control of Hulu and its ad server in 2019. Disney’s ad server already powers 100% of Hulu’s and Disney+’s ad platforms in the U.S., said Aaron LaBerge, CTO of Disney Media & Entertainment Distribution. “Over the next 12 months, [DAS] will be powering all of our addressable platforms,” he said.

The Disney Ad Server is “the heart of our platform,” LaBerge said, and it is complemented by Disney’s Yield Optimized Delivery Allocation product that balances direct-sold vs. programmatic vs. self-serve ad buys as well as the Disney Real-time Ad Exchange that sells Disney’s ad inventory programmatically (and yep, Disney has intentionally named the two ad tech products after Lucasfilm and Marvel characters).

“We’ve made significant investments in our technology platform to serve ads for the entire company,” LaBerge added.

Now, back-end technology, as the label implies, is typically behind-the-scenes work that can be hard to detect on the surface. But a second agency executive said they have noticed the impact.

“The big thing for them that we’ve seen over the past two years, accelerated over the last year and further over the last three months going into this year has been their pace in terms of getting organized operationally and unifying their disparate assets,” said the second agency executive. Specifically, this agency executive cited Disney’s ability to simplify the process of finding audiences across its ad inventory supply pool. 

That capability has likely come in handy when it comes to managing supply and demand dynamics for Disney+’s ad-supported tier. Ferro declined to say how many Disney+ ad-supported subscribers the company has accrued so far, but asked if the company has run into any under-delivery issues like Netflix has with its similarly nascent ad-supported tier, she said it has not.

“The unique thing that I think is different for Disney than Netflix in this particular situation is we have a whole streaming ecosystem beyond Disney+, so we’re able to manage that much more holistically,” said Ferro.

Translation: If Disney+ were to run low on slots for advertisers, Disney could reroute campaigns to Hulu or other inventory sources (with advertisers’ approval). 

Agency executives said they have not encountered ad delivery issues with Disney+, but the first agency executive said, “We have heard them saying things like they might want to shift spend off of Disney+ for certain advertisers to diversify and make room for other advertisers to diversify the creative ad rotation people are seeing.” This executive also said that Disney has not shared numbers with advertisers on how many ad-supported subscribers Disney+ has or how many people their ads have reached on the streaming service.

A Disney spokesperson confirmed the ad spend shift discussions. “Remixing is all normal for us. This practice all ties back to our commitment to a high quality viewer first experience. The beauty of our 100+ advertisers ensures that we have variety, volume and versatility of client categories and creative, which sets the stage for a better viewing experience – and essentially helps maintain our low frequency caps,” they said. A second Disney spokesperson cited the company’s ad tech stack as enabling this delivery flexibility and said the company does not share subscriber numbers outside of its quarterly earnings reports.

All of this will likely come to bear in this year’s annual TV advertising upfront marketplace. As part of its upfront pre-planning process, Disney held more than 120 meetings during CES with advertisers, agencies and tech vendors. Now it is following up on those meetings with the Tech & Data Showcase and, later, the extension of Hulu’s ad products and services to further automate Disney’s ad sales. And a pillar of Disney’s upfront pitch this year seems to be selling advertisers on campaigns that can be automated to go wide across Disney’s streaming portfolio — including Disney+ — and drill down to particular audiences.

“People have that expectation that Disney deliver across our full suite of products,” Ferro said. “And so we wanted to make sure we got that right. Disney+ is part of our full integrated first-party data offering, and so to be able to turn that on and really deliver against it the way we have on Hulu, that’s the plan. All the work has been done. And we’re going to be able to roll it out seamlessly as part of everything we do in this upfront for next year — full scope of scale of all of that as well as the ad formats and all the innovation that we will launch — we will publish it now to the full platform. That’s the beauty of having everything on the same ad server.”