Hulu: CPM Pricing Sinks, Overall Ad Revenues Climb

While overall advertising revenue continues to grow for premium streaming service Hulu, Walt Disney’s premium video platform is seeing key advertiser pricing -- the cost per thousand viewers (CPM) pricing -- declining.

SQAD’s MediaCosts says the average CPM for Hulu in the first quarter was down 17% to $25.00 from the $29.40 level in the first quarter of 2018.

Media analysts point to growing industry-wide supply-and-demand issues, where specific digital video advertising inventory has been rapidly rising against stable demand.

At the same time, Hulu witnessed strong overall advertising growth in 2018 -- $1.5 billion in 2018, up 45% from the year before.

Hulu is forecast to climb to $1.82 billion for 2019.

Hulu benefited due to growing advertising inventory as well as a higher subscriber base. For all its digital video services, Hulu has 29 million subscribers -- up 40% from a year ago.



SQAD, the advertising media cost research company, said Hulu’s CPM pricing in the fourth quarter of 2018 was $25.84. Since fall 2018, SQAD says Hulu’s “high average price” in terms of CPMs has been declining. It was $48.48 in October 2018 and $38.37 in November 2018.

At the same time, SQAD also says Roku, another growing video platform, has seen a 8% gain in CPMs in the first quarter to $38.00. '

For the same period, YouTube had 18% growth to $23.40.

Looking at overall connected TV platforms, eMarketer says CPMs for in-stream ads ranged from $19.84 to $28.33 from the fourth quarter of 2017 to the fourth quarter of 2018.

Industry-wide premium digital media advertising inventory for “premium” video content has been rising. For some platforms, it has resulted in lower overall CPMs.

In April, Hulu said it will be limiting individual commercial breaks to 90 seconds. Commercial breaks had been 180 to 240 seconds long.

In other Hulu advertising news, the streaming video platform recently added "pause" advertising breaks to its service -- where individual messaging appears as a still, display-like translucent ad after a few seconds, following a user's video pause.

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