Where Apple TV+ and Disney+ Are Likely to Outperform One Another

Each holds inherent advertising advantages

Autumn has provided ongoing buzz around content streaming, and a pair of developments in the next two weeks will help define OTT advertising for the foreseeable future. The availability of Apple TV+, the gadget maker’s first foray into original content will be buzzy. And Disney+, the media giant’s streaming service that premieres on Nov. 12, will certainly keep OTT in the news.

Just last week, Roku buying demand-side platform Dataxu grabbed marketers’ attention because it showed that the OTT platform has big plans to attract more ad spend. And major news outlets are examining what all of this chatter means for data and privacy. OTT offers brands the chance to combine the power of visual storytelling with data targeting and measuring campaign effectiveness, something they couldn’t do with traditional TV. Brands are waking up to the opportunity at hand, as advertising dollars spent on OTT streaming video will rise 20% this year to more than $2 billion.

Let’s look at what marketers need to know about Apple TV+ and Disney+ while preparing for how they could transform TV because each has strengths and weaknesses.

Content and scale: Disney

The list of OTT advertising options out there is quickly growing. There’s Hulu, YouTube TV, Amazon Prime, Amazon-owned IMBD TV, Sony Crackle, Viacom-owned PlutoTV, sports-focused FuboTV, Sling TV, Tubi TV, Stirr and Xumo. Not to mention that industry pundits believe OTT powerhouse Netflix will eventually start selling ads against its shows.

What will distinguish Apple TV+ and Disney+ from the pack? There have been around a dozen Apple TV+ original programs announced so far, and they include formidable talent. That number of shows, coupled with ample star power, suggests the venture will garner an audience out of the gate.

Apple TV+ and Disney+ are huge steps toward transforming advertising.

Disney+, on the other hand, seems destined to scale quickly for a few reasons, chief among them is its incredible wealth of recent and historical content from The Walt Disney Company’s television and movie franchises. In fact, there will be 7,000 TV episodes and 500 films at users’ fingertips. And Disney+ will offer new original programs based on popular franchises like Star Wars and Marvel Comics. Perhaps most importantly for scale, Disney+ will be free for the first 12 months for all Verizon’s unlimited wireless customers, which total around 100 million. The Verizon promotion should translate into a number of eyeballs that will help Disney+ be a compelling ad platform out of the box.

Advertising: Apple

Marketers will want to know if the ad targeting for these platforms is strong. And while that reality isn’t clear, we can make assumptions based on each company’s pasts.

CEO Tim Cook and his marketing team have positioned Apple as valuing user privacy over data-based ad targeting. Yet they’ve been acquiring and developing digital advertising systems for many years. Apple has been in the advertising game for about a decade, and while it made strategic mistakes with now-defunct iAds, it learned from them and created a $1 billion mobile search advertising business. It also understands how permission-based, first-party data can be collected and leveraged. So it stands to reason Apple TV+ will offer more granular options for hitting the right audiences than Disney.

Disney, in recent years, has drawn criticism from media buyers about its lack of cross-channel audience segmentation. At the same time, late last year it forged a partnership that will make Google the backbone of Disney’s digital ad offerings. While the Google horsepower is intriguing, the Disney+ advertising is, for now, a black box.

Measurement: Apple

Major brands are going to want to not only know which consumer sets they are advertising to but also whether their campaigns are driving sales. To gain such confidence, these OTT platforms will need to offer sophisticated performance data, including whether the ads drove foot traffic. Apple TV+ seems better positioned to satisfy this sales attribution need because of its tech history, and it bears watching how soon the company and Disney+ marketers start offering case studies that prove the efficacy of their platform.

Further, mobile intelligence is going to be at the heart of connecting OTT ads to in-store sales as brands look to maximize their return on investment. As CPGs, retailers and DTC brands alike continue to buy ads that are set against original programming, location data can help them determine whether, for instance, an ad for clean skincare drove store visits. And Apple’s institutional knowledge around mobile data should give it an advantage over Disney.

Bridging the gap between online and offline is crucial for all advertising, and OTT will be no different. This space represents an intriguing opportunity for marketers to increase sales, and it’s a great opportunity for Apple and Disney to stake a claim in this burgeoning realm.

One only has to look to Amazon to see OTT is changing advertising as well as this space’s overall potential. According to eMarketer, video, including OTT ads, is the main reason why display will eat into 20% of Amazon’s total ad business in the next few years.

Apple TV+ and Disney+ are huge steps toward transforming advertising for different reasons. For Apple, its advantages are all about its tech and data expertise, while for Disney, it’s about the allure of its treasure trove of noteworthy content and its ability to scale. To win over big brands’ confidence, it will be crucial for each to connect the dots between campaigns and sales, whether the transaction takes place online or in a store.