Hulu Launches Dynamic Ad Insertion, Hits 20 Million Subscribers

Hulu told advertisers at its upfront on Wednesday that it’s reached the 20-million-subscriber mark.

While 20 million subscribers is a lot smaller than rivals Netflix (125 million subs) and Amazon Prime (100 million subs), Hulu is ad-supported and only in the US. Ad-supported subscribers are up 40% this year to 40 million viewers, said Hulu’s head of advertising Peter Naylor.

“If you look at every person who signs up for Hulu today, a wide majority will choose ads,” he said.

To make ads more relevant and personalized, Hulu is testing dynamic ad insertion, which serves different ads to different audiences based on their characteristics. Naylor declined to provide more detail about the product in its early stages, but it’s testing with a select group of networks.

On the engagement front, viewing was up 60% on the platform in 2017, during which users streamed a collective six billion hours of content. Time spent per subscriber was up 8%, and viewers have doubled their consumption of on-demand content since Hulu released its Live TV product last year.

With Hulu’s light ad load – less than half of that on linear TV – consumers are more engaged with ads on its platform, said Hulu CMO Kelly Campbell.

“Viewers make a conscious choice on the content they watch and whether or not they want to see ads,” she said. “Ads on Hulu are nearly twice as effective as on linear TV because viewers on Hulu watch with purpose.”

Eighty percent of Hulu customers are Nielsen light viewers, which means they’re hard to reach and measure on linear TV, Naylor said. Half of the audience that advertisers can reach on Hulu are unreachable on broadcast TV networks. And with a median age of 31 years old, it’s an audience that advertisers need.

“You’re connected with a consumer that otherwise wouldn’t have seen your ads,” Naylor said.

Hulu also announced updates to its measurement capabilities, including a partnership with Experian to match advertiser CRM data to Hulu data to measure sales lift, a partnership with Polk to measure auto sales lift and partnerships with Nielsen and IRI to close the loop on CPG sales. Hulu is also using Nielsen’s digital ad ratings product to measure overall viewership.

The streaming TV network has worked with brands like Aflac to measure effectiveness of their TV spots. Just 48 hours after launching its chat bot with a TV spot on Hulu, Aflac overshot its target by 101% and had thousands of consumers using the bot.

“We know it’s not enough to prove brand effectiveness,” Naylor said. “We must also prove sales effectiveness.”

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