Why Hulu Is Betting On New Ad Formats

Hulu is trying to change how the industry thinks about the TV ad experience.

Over the past few years, Hulu has built interactive ad formats to fit consumer viewing behaviors. Earlier this year, for instance, Hulu introduced pause ads, which are served as overlays when a viewer pauses a show.

Hulu has also maintained its light ad load and fixed frequency-capping issues.

“The idea of breaking up content, delivering ads and then returning to content is a paradigm that doesn’t need to exist,” said Jeremy Helfand, head of ad platforms at Hulu.

Hulu also points to research that its new ad formats, besides providing a better, non-interruptive viewing experience, are also more effective than regular ads. Pause ads have driven a 68% increase in ad recall as measured by Kantar Millward Brown, outperforming industry benchmarks by 5X.

People press pause on Hulu 30 million times per day, Helfand said. So far, Procter & Gamble and Coca-Cola have beta-tested the product.

“Pause is taking advantage of a natural behavior that’s happening in OTT,” Helfand said. “There’s also a positive halo effect. Consumers associate the innovation of the advertising with the innovation of the brand.”

Agencies and brands, however, are still skeptical that new ad experiences are actually resonating with consumers. Some think these new formats distract from the deep-rooted issue of overstuffed ad loads that caused consumers to tune out linear TV.

But Hulu sees a “direct correlation” between positive consumer sentiment and advertiser ROI, Helfand said. Hulu wants 50% of its business to come from non-interruptive ad formats by 2020.

Hulu will introduce a “binge ad” format later this year which lets people first watch branded content in exchange for an ad-free viewing experience, when watching three or more episodes of a show. Hulu is also working on more transactional ad formats for direct-response advertisers, as well as sequential advertising experiences for consumers.

“You should expect to continue to see new formats from Hulu under the umbrella of what we call situational advertising,” Helfand said.

In addition to creating new formats, this year Hulu put a frequency cap of two ads per hour and four ads per day for any given brand to target a specific viewer. As a result, consumers now see double the number of brands in an hour of streaming content on Hulu.

Hulu will continue investing in automation, data and measurement and experience to improve television for both consumers and advertisers. Over the last year the network launched a private marketplace and direct CRM matching capability for advertisers.

“Attribution is of keen interest to advertisers, whether you’re a major brand looking for accountability or a DTC advertiser with an increasing interest in using TV,” Helfand said. “We expect to be held accountable for all advertising on our platform.”

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1 Comment

  1. Jay Glogovsky

    I think it’s too early to claim “Hulu has also maintained its light ad load and fixed frequency-capping issues.” because it’s not true. You receive the same ad over and over again. I have attempted connecting with the Ad Ops team over at Hulu many times because of the frequency issue, but they refuse to help. Now I just email the brands directly and complain about the frequency problems on Hulu, in the hopes of them reaching out to Hulu’s Ad team.