How Disney is leveraging AI for advertising

The annual Cannes Lions International Festival of Creativity kicks off in Cannes, France on Monday, with some of the leading media companies gathering to celebrate innovation in advertising and related fields.

Disney's President of Global Advertising Rita Ferro (DIS) joins Yahoo Finance Anchor Rachelle Akuffo and Executive Editor Brian Sozzi from Cannes Lions to give insight into how Disney is utilizing AI for the next generation of advertising.

Ferro enthusiastically comments on one of the biggest themes for this year's event: "I think you will see a transition to an immersive platform where streaming will underpin the basic core of the reason people come there. But you'll also think about how you interact on your social platforms, how gamification comes into that, shopping comes into that experience all within one advertising experience."

She continues by using ESPN as an example: "You can imagine a world where a sports fan will come to ESPN and they'll be able to do everything in one platform; their sports betting opportunity through ESPN Bet, they'll be able to create their fantasy experience there, they'll be able to do shopping, interactivity, simulcast, watch short form, share content. And so it's really a migration of streaming will become a much more immersive platform or gaming and how that will participate as part of a full experience and surrounding fans with the content."

For more of Yahoo Finance's coverage of Cannes Lions International Festival of Creativity, click here

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Nicholas Jacobino

Video transcript

Joining us out here today is Rita Frow, Disney's president of Global Advertising here in beautiful ca.

So obviously, we have this gorgeous backdrop a lot, a lot of nature here.

But another thing that's always on people's minds is a I and a lot of people are wondering how is Disney using a i How are they implementing it for sort of the next iteration?

Uh, well, thank you for having me here, by the way.

You're absolutely right.

This is stunningly beautiful.

I mean, who wouldn't want to be here talking to you guys?

Um, we've been using a I a lot in our advertising technology stack around our algorithms and how we're optimising yield across our tech stack.

We have been exploring and we're really working there.

There's a lot of meetings actually, this very week on this topic to talk about what are the processes optimisation that we can really leverage around the use of a I really around creative and managing the volume of creative.

We go through 40,000 pieces of creative today, a day around our platform.

And when we think about the scale of what we have to actually deliver over the course of time in terms of growth and streaming.

We really need to automate that process.

And there's been so many vendors who have come to us with great opportunities of how we can do that.

Um, we're talking to a lot of those in that area also around advertising innovation.

So think about shopp ball interactivity, uh, everything we're doing in that space as well and so super excited about what it will be for our business.

Um, but I still think it's very early days.

Blow some minds.

Uh, for Rita, you mentioned innovation, you know, for consumers and investors out there, If we're having this conversation a year or two from now, how might Disney look and feel differently because of a I Yes, I think it's gonna be much more.

You know, we talk a lot about our streaming platform today, and I think you will see a transition to an immersive platform where streaming will underpin the basic core of the reason people come there.

But you'll also think about how you interact on your social platforms.

How Gamification comes into that shopping comes into that experience all within one advertising experience.

Um, think about as well.

You know, I. I use the example of sports because it's the easiest and as we imagine, and we further digitise our sports business.

We've talked a lot about ESPN flagship in the last couple of months, but you can imagine a world where a sports fan will come to ESPN and they'll be able to do everything in one platform.

Their sports betting opportunity through ESPN bet they'll be able to create their fantasy experience.

There.

They'll be able to do shopping, interactivity, simulcast watch, short form share content.

And so it's really a migration of streaming will become a much more immersive platform or gaming and how that will participate as part of a full experience and surrounding fans with the content and how they use and use it today, which today they are using it across many devices.

But bringing that all together across one experience will be really important.

There's been some murmurs here on the ground at Cannes about Amazon ad prices and their They have a lot of inventory, and they're bringing down a prices on streaming.

How impactful is that to to Disney's business?

I think the entire marketplace right now, What you saw in 2023 was 40% growth in C TV capacity across the year.

Q 1 60% growth across the C TV environment.

And so scale matters.

Performance matters, your technology and capabilities to deliver outcomes matters.

We've created interoperability across the marketplace with so people can plan by and measure across our full technology stack with any platform or vendor they want to use.

We're in a really good place, right?

Some companies are great at technology.

Some companies are great at storytelling.

Some companies are great at innovation.

We're great at all three, and that's where the magic happens.

And so we're very excited about our position.

We're seeing that in the performance of the upfront, Um, and where people are coming first.

And so we're very excited about where we're gonna be able to do with clients.

I do think by the way, there's no question it's created an excess of supply in the marketplace.

For a marketer, you have to figure out where am I going to spend my dollars?

What's the right partner to do that with?

And I think that's where the combination of creativity and technology really needs to really deliver on the outcomes, and you talked about, uh, sports there.

We don't want to talk about the sports streaming platform that we're seeing here, obviously with the Warner Brothers, Discovery and Fox.

A lot of people wondering what that's going to look like, the discussions that you're having pre launch about, what that's going to look like.

So venue, which is that platform is a partnership between US, Warner Brothers and Fox, and it is a digital MVPD.

So think of Hulu Live another way to access sports content.

We knew that there were a bunch of people who never had a a cable subscription who are big sports fans, and so we wanted to give them a product that was price right that allows them to access 50 to 60% of the sports available in the marketplace in one place.

And so that's what that product is.

It will be part of everything I bring to clients, so as a partner, we have 60 partners.

For example, in college football, all of those partners, as part of their ESPN college football experience, will have every position that they buy delivered across our full suite of products, including venue.

Much has been made about the demise of of linear TV networks.

And look, it's structurally.

It's an it's a It's a hurting business, Um, because of the move to streaming.

But this is a presidential election year.

How?

What's the ad outlook for linear?

Because what during political years, usually this is usually a pretty big time, right?

That's right.

I mean, political years tend to have a spec not only on the on the national side, on our stations as well.

And so what we have seen is you're absolutely right.

There is a a consistent decline in linear.

I will say Broadcast has seen a much more stable decline than our cable networks, and and part of that is just the volume of that content that sits within, you know, streaming platforms.

But you know, our broadcast network has a significant amount of sports and has a significant amount of news, which is live and a significant amount of live programming that keeps it relevant.

And so there is audience decline, and and so the advertising decline on those platforms is in line with that, um, in a in a political year and and As you know, we have one of the, uh, debates coming up, and so we're very excited about being able to bring that to audiences.

But ultimately, in a political year, you see more advertising.

It depends on what's going on from issues, advertising and what markets.

If there are secondary races, things like that, and so it's still a little early.

So then, being that obviously, this is going to be a big boon for advertisers, a lot of a lot of eyes and a lot of different on a lot of different platforms.

How do you see Disney competing with Amazon when it comes to the direct to consumer experience?

And really, how are you managing that that ad spend?

Yeah, I mean, Disney competes with Amazon, Google and everybody else.

And so, you know, to me, the big the big share is still YouTube, right?

Like you, you just have to look at the earnings every quarter.

I think we we have done an extraordinary job because we have scale and we have premium storytelling and brands that everyone recognises.

And, you know, part of the streaming environment is really discoverability and finding and engagement and all of all of those things that feed into what the opportunity is.

We have a scale and premium content.

We have sports and entertainment programme.

We have a combination of the three of the best platforms in the market.

We actually moved Hulu on to Disney Plus and we saw a rise not only in the consumption of time spent on the Disney plus but also Hulu as a stand alone experience.

And Hulu Live is a big portion of that where you can actually get your full.

What would be your normal cable subscription experience within a Hulu environment?

Um, we announced recently the the integration of Warner Brothers Discovery is part of a bundle offering to the consumer.

And so I think you every every platform has their I would say advantage if you will, in terms of how you talk to customers.

I think the fact that Hulu and Disney have been in the market a long time with an advertising business, we understand the advertising environment.

We understand how clients wanna talk to us and and how they want their their partnerships to look like across our platform.

I think sports continues to be a massive driver of opportunity, not only within our linear businesses but in streaming.

And how we bring that all together to market is really a differentiator that I don't think anyone competes with us on.