Hulu Taps Into Audience Science

by Gavin O'Malley, Jul 15, 2009, 6:01 PM

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Exploring more lucrative ad models, Hulu has tapped AudienceScience -- the behavioral targeting firm formerly known as Revenue Science -- to test the technology on its pure-play video ads. Jeff Hirsch, president and CEO of AudienceScience, recently predicted that behavioral targeting spend will grow to over $25 billion, and surpass search spending, by 2020.

To meet that lofty goal in an increasingly video-centric universe, however, behavioral targeting must expand beyond display advertising, Hirsch said on Wednesday.

"Behavioral targeting has seen proven success in the realm of display advertising, and with the rise of compelling video ads and online TV viewership, applying the same advanced targeting technique to this channel has exciting potential," said Hirsch.

The goal, Hirsch added, is to give advertisers the opportunity to broaden their reach online, and maximize their limited online budgets.

And Hulu is certainly the place to do it, as its monthly viewership approached 40 million users in April -- or 373.3 million streams -- according to Nielsen VideoCensus. Still, Hulu -- originally a joint venture between NBC Universal and News Corp. -- has yet to establish a thriving business model. For one, critics question whether it runs enough ads to support the production of premium content. Perhaps as a result, Screen Digest analyst Arash Amel recently revised his 2009 earnings forecast for Hulu down from $180 million to $120 million.

Despite the recession, the general industry consensus is that emerging marketing and media technology is continuing to grow this year. According to a study released earlier this year by AdMedia Partners, a clear majority -- 70% -- of senior industry executives expected behavioral marketing, in particular, to grow in the neighborhood of 5% this year.

Hirsch recently estimated that about 24% of online advertisers now use behavioral targeting technology, with that proportion expected to reach 85% by 2020. AudienceScience serves targeted ads for a long list of publishers, including Financial Times, Gannett, New York Times Digital, Reuters.com, and Wall Street Journal Digital.

Thanks to continued broadband penetration and various publisher efforts, video is indeed the name of game, today. Year-over-year, the average online consumer spent 37% more time watching video in June, according to data released on Wednesday by Nielsen VideoCensus. That amounts to about 188 minutes of viewing time per viewer.

Web-wide in June, total video streams increased 33.9% year-over-year to more than 10 billion, while unique video viewers increased by 12.7% to over 134 million. ,p> While still a distant second to YouTube -- which accounted for over 6 billion streams and nearly 100 million unique viewers in June -- Hulu racked up more than 348 million streams and about 10.7 million unique viewers during the month.

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