Everything You Need to Know About Disney+'s New Ad Tier

At long last, Disney+'s ad tier—called Disney+ Basic—is here. Nine months after first announcing it was getting into the AVOD market, Disney+ launched its ad-supported offering on Thursday, bringing on more than 100 partners "across every major holding company" and "every single major brand," according to Disney ad sales chief Rita Ferro. "Not only is it 100 advertisers, but it's really multiple brands across those advertisers, which is important when you launch a product to make sure you have diversity of advertisers and creative messaging so that you can have many, many experiences across the platform," Ferro said. "They have beautiful ads that we've seen across the board, some that were unique for the launch of Disney+, and we're so excited about what that's going to mean for us in terms of the experience and growth of Disney+ as more and more viewers come on." Speaking of those viewers, while Ferro didn't share subscriber expectations, a recent analysis by Kantar found that one in four Disney+ subscribers could trade down to the new AVOD tier, which is rolling out at $7.99 per month (the previous price of Disney's ad-free tier, which is increasing to $10.99 per month). And with Disney+ topping 164 million subscribers as of the fiscal fourth quarter, it seems those 100+ launch partners could have a fairly sizable audience. Disney Sets Disney+ Ad-Supported Tier Debut Date, Streamer Price Hikes To thank its initial partners, Disney is showcasing the launch ads on its Times Square billboards Thursday. "You'll see that running throughout the day. And we're so excited to say thank you to those who have come on this journey with us and who have been there with us for a long time but are really there with us at the launch of Disney+ and what that will mean going forward," Ferro said. At launch, Disney+ Basic will have the full catalog of content and several features found on Disney+'s Premium plan, including profiles, concurrent viewing and high-quality formats. However, the offering won't have downloads, GroupWatch, SharePlay or Dolby Atmos at its debut. Here's everything you need to know about Disney+ Basic: Starting slowly with ad formats and capabilities Disney+ Basic is debuting with 15- and 30-second spots (as well as some 45-second spots depending on creative) that will air in pre- and mid-roll ads, with advanced targeting capabilities and new formats coming later as the company continues to test. "That was intentional because we're selling run of network at the beginning. At the end of the first quarter, we will roll out DAR targeting and Disney select audience guarantees and drive a little more opportunity to really buy unified audiences across our platform in the upfront as we move forward with additional targeting," Ferro said. "We're starting and learning slowly to make sure that we can get the experience right." According to Ferro, the plan is to roll out all of the advanced advertising capabilities from Disney's ad server available across Hulu and its owned and operated TV Everywhere apps for the full suite of AVOD offerings as the company heads into the 2023 upfront. That means everything from pause ads to e-commerce and expanded experiences are on the way. An (ad) load of testing Disney+'s goal is to have 4-minute ad loads per hour when the inventory is fully sold; however, Ferro explained that the company intentionally undersold inventory at launch, so the ad load will be lighter in the early going. "We were very deliberate with our partners as we rolled out the opportunity to make sure that we planned how we were going to deliver these campaigns across the next couple of months," Ferro said. "We wouldn't promise something we could not deliver." More capabilities and larger ad loads will deploy as Disney+ Basic builds up its audience. "We purposely paced ourselves in terms of the ramp-up of those advertising campaigns, knowing that by the middle of next year, when we have better targeting and measurement, when we have more data capabilities, when we have Disney and Hulu on the ad server, we will be able to do much broader and more expansive audience-based buying," Ferro said. Disney and VideoAmp Team Up for Clean Room Integration The advertisers you'll see—and the ones you won't Major agency holding companies, including Dentsu, Havas, Horizon, IPG, Omnicom Group, Publicis, RPA, Stagwell and WPP, are all on board at Disney+ Basic's launch, and the company has more than a dozen categories, including retail, apparel, autos, financial services, restaurants, technology, telecom, CPG and travel. Some of the top brands that will be part of Disney+ Basic include Google, State Farm, Verizon, Walmart, AT&T, T-Mobile, Aflac, Fidelity, Panera, Kraft, The Home Depot, Lego, Target, Honda, Macy's, GM, Taco Bell, Meta, P&G, Chanel, Nintendo, Expedia and Kohl's. However, the service is also debuting with several brand restrictions. Don't expect to see competitor movie studios, network competitors, alcohol brands or political advertising on the platform. And part of that is due to Disney starting slowly with its launch capabilities until targeting is added. "We're being very careful to make sure that the right advertising categories that would require targeting and restrictions are not on the platform at launch," Ferro said. Frequency caps will ensure variety With so many advertisers, the odds are the initial audience won't get many repeat ads. However, Disney+'s Basic ad tier will ensure that by applying a strict frequency cap. "It's more strict frequency caps than most platforms," Ferro said. "It's a frequency cap of one per hour, two per day and 12 per week." Consumers should keep in mind that those caps are applied per user profile, not per household. The wonderful world of brand and consumer safeguards Though there's no targeting at launch, audiences will be separated by 18-plus and 17 and under. And as Disney+ previously announced, there will be several restrictions regarding younger audiences. "We will not have advertising in kid mode. We will also not have advertising in preschool content. And then anything that is 17 and under will have ads, but it will be non-targeted ads," Ferro said. As advanced targeting rolls out, including DAR and other opportunities, those offerings will only apply to users who are 18-plus. "Brand safety, obviously, is a very important piece of what we do. And I think from a brand marketer perspective, when you think across the brands and content that exists on Disney+, there's no question that you're going to air within content that is brand safe and relevant for all of the family," Ferro said. "Not necessarily the case across every single platform in the marketplace, and I think that's a huge competitive advantage." Kareem Daniel Exiting Disney in Returning CEO Bob Iger’s First Big Move New leadership, no problem Disney made headlines last month with the surprising news that Bob Iger was returning to the company and replacing Bob Chapek as CEO. And Chapek's first big move in his return to the company was to dismiss Disney Media & Entertainment Distribution chief Kareem Daniel, who had been Ferro's boss. The streamer's ad tier was announced under Chapek, and the outgoing CEO seemed to have big plans for streaming. But according to Ferro, that leadership change has nothing to do with Disney+'s ad tier. "No, we're launching on Thursday," Ferro said when asked if the leadership changes would affect any Disney+ Basic plans. The bottom line Disney+ Basic had "robust" demand from advertisers, according to Ferro, but the ad sales chief made it clear that the launch was about managing the amount of opportunity Disney was bringing to market, knowing it would only grow from there. "The beauty of this offering is that most advertisers wanted on since before we actually even had an advertising proposition. Our pitch is unique in that Disney is the No. 1 storyteller in the world with best-in-class technology and content from franchises that are beloved for generations," Ferro said. "And advertisers want to be a part of that." According to Ferro, marketers can look for more details about the evolution of the product at Disney's tech and data showcase in January.

Programming & Performance

Everything You Need to Know About Disney+'s New Ad Tier

Ad sales chief Rita Ferro on Disney+ Basic's debut—and what's next

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