Advertising on Hulu

In 2009, caused concern with investors when advertisers were not lining up to buy slots alongside the premium streaming video content of the site. Despite a strong surge in traffic and viewership that same year, competition from other video websites and Hulu’s relative newness on the scene led advertisers to remain cautious.

However, halfway into 2010, advertising on Hulu is not only flourishing, but also undergoing revisions in order to provide more targeted commercial experiences. For example, viewers may choose to watch one longer commercial and then view their video without interruption. Or, they may choose between 2-3 themes to view during commercial breaks that occur at regular intervals, much like advertising during traditional television broadcasts. Providing viewers with options helps Hulu gauge what format their followers prefer, and offer advertising encounters that adhere to those expressed choices. Viewers may also be less annoyed by their television interruptions when they feel they have some say in the way advertising is presented to them.

Unlike television commercials, online video viewing provides a much better idea of how many eyes are actually landing on ads—the numbers are much more traceable and can be broken down by hits, replays and other factors. But that doesn’t mean advertisers are in a hurry to convert formats, even to save money. Many companies would still rather throw big bucks at television advertising than pay more per given, engaged viewer online.

But Hulu hopes to take advantage of the TV/Web differential by tailoring its content to viewers in an effort to get advertisers greater bang for their buck, further antiquating the advertising notion that more eyes equals more buys. They mean to do this by really utilizing the interactive element that is also unique to ads on the Internet. Not only does Hulu allow viewers to often choose from the outset what type of advertising experience they prefer, but the website also recently added an instant-feedback system. At first, this feature was designed to show two options: thumbs up or thumbs down. Currently, a bar at the top of each commercial asks, “Is this ad relevant to you?” Viewers may choose yes or no. To further focus advertising, Hulu may also provide short surveys that viewers can fill out in lieu of seeing any ads at all during their playback.

By asking viewers what kind of advertising experience they prefer and allowing them to watch ads only for products and services that are most relevant to their lifestyle, Hulu can assure advertisers that although online ads may not cast the same broad net as television ads, at least they can narrowly focus who is seeing them—and provide advertisers with a much better return on their investment, with a higher chance of conversions, by reaching out to those most likely to need or want what they’re selling. Smarter advertising—not merely more advertising—continues to be the trump card that online formats hold over conventional television broadcasts when it comes to video-adjacent advertising.

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