Disney Built an Ad Engine for Streaming's Future (and Maybe the Metaverse's Too)

Disney Plus' launch of a cheaper, ad-based tier was the culmination of three years of work on a custom-built advertising system. It doesn't stop there.

Joan E. Solsman Former Senior Reporter
Joan E. Solsman was CNET's senior media reporter, covering the intersection of entertainment and technology. She's reported from locations spanning from Disneyland to Serbian refugee camps, and she previously wrote for Dow Jones Newswires and The Wall Street Journal. She bikes to get almost everywhere and has been doored only once.
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Joan E. Solsman
3 min read
Disney Plus on an iPad
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When Disney Plus launched its cheaper, ad-supported tier last month, it mostly meant people like you could keep streaming Marvel or Star Wars without paying more. But the custom-built machinery behind those ads is technology Disney has been building behind the scenes for years -- and it will likely keep powering its advertising as Disney makes inroads into the metaverse too. 

The launch of the Disney Plus ad tier was the "culmination" of roughly three years' work on in-house advertising technology, according to Aaron LaBerge, chief technology officer of Disney's Media and Entertainment Distribution division.

A man with glasses and short cropped gray hair smiles from a seat in a baseball stadium.

Aaron LaBerge is chief technology officer of the Disney Media and Entertainment Distribution division, which is in charge of (among many things) all its streaming services. 

But December's Disney Plus ad-tier launch wasn't the tech stack's final climax. Be it virtual environments, metaverse experiences or "whatever advanced storytelling canvases are coming," LaBerge said in an interview Friday, "the data will travel there and it can manifest itself in a relevant form of advertising."

Watching commercials in the metaverse may not be your first idea of an exhilarating new chapter of entertainment. But just as an ad-supported tier of Disney Plus means price-sensitive people can binge Black Panther or Bluey at a lower price, ads in a metaverse can open up pathways to making these new formats more accessible for fans as Disney stories begin bridging the real world with virtual ones.

Under LaBerge, Disney has built what's known as its own ad tech stack, a term describing a broad suite of programs, servers, systems and data. For Disney, having its own ad apparatus across all its streaming platforms means marketers can run more effective campaigns, and the company itself has flexibility to innovate. 

Disney's tech stack will get its moment out from behind the curtain later Wednesday, when the company hosts a virtual showcase for brands and agencies to highlight it and other ad advancements. 

But even if the various elements of Disney's ad tech stack go over your head, you'll probably recognize some of their names. 

One feature is an algorithmic engine that determines when to serve an ad, where and to whom. Disney calls it Yield Optimized Delivery Allocation -- or, yup, YODA. Another is a platform called the Disney Realtime Ad Exchange. This is a system that helps automatically coordinate ad supply and inventory, acting like a programmatic auction house for advertising. But you can call it DRAX, as in Guardians of the Galaxy's Destroyer. 

A still from Star Wars shows Yoda, next to a still from Avengers: Infinity war of the character Drax

Yoda from Star Wars and Drax from Marvel moonlight as parts of Disney's ad tech stack. 


Before DRAX or YODA are unleashed into any metaverse, though, Disney has its sights on near-term goals. 

The technology is going to be intrinsic for the rollout of Disney Plus ad tiers beyond the US this year. And "we'll continue to focus on viewer-first advertising [with] more innovative ad formats becoming available on all platforms," LaBerge said. As streaming has risen in popularity, it has evolved advertising into new formats that weren't possible on regular TV. Disney's Hulu, for example, was one of the originators the "pause ad" that, rather than interrupt your program, throws a marketer's message up on your screen when you choose to pause it instead. 

"We just want to make the ad experience great and seamless, so that people can enjoy more content," LaBerge said. 

Read more: Disney Plus: Price Hikes, the New Ad Tier and Everything Else to Know

Watch this: Why Streaming Is Getting More Expensive