Hulu Revamps Ad Policies, Personalizes TV Experience

HuluAs Hulu looks to appeal to more advertisers, the company will begin charging advertisers only for spots that run in their entirety. If a viewer does the equivalent of using a DVR online and skips a portion of an ad, the marketer will not have to pay.

The initiative is an evolution of Hulu’s “ad swap” offering, where a viewer can begin watching an ad and opt to switch to another more relevant or entertaining one. In that case, the initial advertiser that is pushed aside is not charged, but the marketer that benefits from the switch is.

Hulu will hold a TV-style upfront presentation this week in New York, where it will plug these options, as well as its veteran “ad selector” option.

Hulu, which is moving into original programming, garnered $420 million in revenue last year -- a 60% jump. CEO Jason Kilar said the company is ahead of that pace so far in 2012. He spoke Tuesday at the Ad Age Digital Conference.

On Hulu Plus specifically, the pay service, the company now has 2 million-plus paying subscribers: 500,000 more were picked up in the 2012 first quarter.

Kilar said there are four metrics the company uses to evaluate whether its ad experience is working for marketers: brand recall, ad message recall, favorability and purchase intent. A Nielsen arm does the measurement and compares the Hulu results to a more traditional platform, such as TV, and Kilar said brand and ad message recall are coming in at two times the other outlet.

Looking forward, Kilar said he expects six trends to dominate the future of TV:

*The consumer experience will be increasingly personalized, a la Pandora versus traditional radio in that business.

*Content options will be exceedingly comprehensive, with unending choices available on-demand from current series to archived stuff.

*The TV experience will thrive with “life.” He may have been referring to the efforts to make it more social with person-to-person connectivity.

*TV will be “unusually convenient.” Favorite shows available anywhere and everywhere.

*Formats will meet the content; traditionally sitcoms have about 22 minutes of content and dramas 44. Now, there will be a need to use clips or shorter offerings that can allow mobile consumption, which fits time and place constraints of transport or location.

*There will be relevant, higher-value advertising. This is a core emphasis at Hulu: to move away from widely distributed ads, hoping to find the right audience within the distribution and move toward ads that have an opt-in element or ones that are more contextual.  

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