There was never any doubt that Disney+ would be a massive success, providing the exclusive streaming home of beloved IPs ranging from Star Wars to Pixar to the Marvel movies. Still, few could have predicted just how quickly it would come to dominate the competition, emerging almost immediately as one of the most popular and successful streamers. Now, a few years after its launch, Disney+ is building on its success by offering some new options for viewers… and, for advertisers.

Late last year, Disney announced that its streaming service, previously ad-free, would be rolling out a “basic” version, offering subscribers the opportunity to pay lower monthly rates in exchange for watching a few ads. The Disney+ Basic experience was officially launched in the fall, and has mostly been met with positive reviews from consumers: Those who desire a more affordable Disney experience can get it while having to watch a relatively small number of ads per each hour of programming. And for those who don’t want to deal with ads, the original Disney+ experience is still available, simply at a higher-priced tier.

But of course, this isn’t merely a gamechanger for viewers. It’s also a big deal for advertisers. But is advertising on Disney+ actually a good investment?

What Advertisers Should Know

Before allocating any ad dollars to the Disney+ Basic platform, there are a few things advertisers might want to know. The first is that Disney+ currently offers options to provide limited ad content on most of its content catalog. The notable exception is that no ads are played during preschool content, an admirable accommodation on Disney’s part. Additionally, the service has stated that it will limit ad time to about four minutes per hour of programming.

Naturally, advertising on a platform as popular as Disney+ holds the promise of great reach… but what about targeting features? When Disney+ first rolled out its advertising platform there were no real targeting features to speak of, which in our estimation made it a total waste of time for smaller and local businesses.

Since then, Disney+ has retrofitted its platform with some of the ad targeting features employed by Hulu. As such, advertisers can now target their Disney+ ads to audiences based on age, gender, and geo-location, allowing a little bit more flexibility to target ad content to desired demographics.

It’s also worth acknowledging that Disney actually built its own proprietary technology for digital ad delivery, providing its advertisers with a way to use first-party data. This is something that makes Disney+ unique in the world of online streaming; for example, Netflix relies solely on third-party data tools to help its advertisers target their ads.

And, in the months to come, Disney+ promises to offer biddable, programmatic advertising options, which might go a long way toward making it a more functional and useful tool for advertisers.

The Downsides of Advertising on Disney+

While we admire the business acumen that Disney+ has shown, and while we are intrigued by some of the more advanced features they claim to be developing for advertisers, our current advice to smaller, more local businesses is that advertising on Disney+ simply isn’t a good investment.

There are multiple reasons for this, and the first is simply that it’s expensive. Disney+ offers premium inventory for big spenders (think nationally recognized brands), and while that ad inventory may guarantee highly prominent ad placement, it’s not a cost-effective solution for more modestly sized or regionally focused companies.

The other big concern is that the targeting options provided by Disney+ simply aren’t what they would need to be in order for this premium inventory to be worthwhile. Yes, Disney does offer some tools that allow advertisers to narrow their audience by age, gender, and geography… but these are simply demographic distinctions. They do not necessarily have any real connection to consumer intent, online purchasing history, and other important behavioral factors.

Those are really the types of information that help advertisers target audiences most effectively, ensuring that they are only displaying their ads to consumers who have expressed interest in a particular product or service, or who have otherwise shown a high likelihood of conversion. And there are plenty of other places where advertisers can access that level of targeting, spending their ad dollars more cost-effectively.

Keeping an Eye on Disney+

The possibility of a more programmatic model sounds promising and may give us greater reason to recommend Disney+ in the future. We’ll be sure to keep you posted.

For now, we’d simply say that there are many efficient and affordable ways to connect with your target audience, without the need to pay premium Disney+ prices. We’d be happy to talk with you about advertising strategies that fit the needs of your business or brand. Reach out to enCOMPASS whenever you’d like to chat.