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Hulu Finds Viewers Will Watch Ads When They Have a Choice

Nov 23, 2008  •  Post A Comment

When given the choice of ad to watch before an online program, a whopping 88% of Hulu viewers are opting to view a two-minute advertisement in exchange for no ads during the rest of the show.
That’s in lieu of watching the normal Hulu commercial load of about four 30-second ads in a 22-minute program, according to data from Hulu shared with TelevisionWeek.

Hulu.com

YOU CHOOSE Hulu is seeking to expand users’ options for viewing ad content.

Though the long-form opt-in ads appear on the site only occasionally, the early data indicates viewers want to control the kind of ads they see in the shows they watch online. The high opt-in rate also suggests that because consumers are selecting the ads, they are more likely to be engaged with them.
“The opt-in rate is proving this is something people want,” said Christina Lee, a Hulu spokeswoman. Advertisers buying long-form ads on Hulu include Columbia TriStar, American Express, Hyatt, Paramount Pictures, Sprint and Capital One.
The format doesn’t work for every marketer, but both Hulu and media executives are encouraged by the early success.
“We are trying to break down a lot of these very traditional ways of thinking about advertising, so this is a way to experiment and an example of something you’ll see us doing,” Ms. Lee added.
The Hulu data also bolsters two commonly held advertising beliefs—consumers aren’t averse to ads and they do like choices, said Lori Schwartz, senior VP and director of the Interpublic Emerging Media Lab.
“What consumers don’t like is being stuck watching long pre-rolls or being forced to participate and being forced to watch stuff that isn’t relevant,” Ms. Schwartz said. “When you give them a choice, you are thinking about them, and that gets them excited. We are in this culture now where people expect participation and expect to be included and expect two-way communication to happen.”
An opt-in ad format also opens new opportunities to fold in additional questions about the brands or to offer coupons, she said. Branded entertainment ads are a natural fit for movie studios and companies like Nike that have a story to tell, she said.
They also could work for products that are more involved or technical in nature, said Susan Bratton, CEO of podcaster Personal Life Media and a marketing expert. That would include, for example, Nautilus exercise equipment, Weight Watchers weight-loss programs, Calphalon cookware or Sony Bravia HDTVs, she said.
“Factor in lowered costs for Web video production, informative ads on Hulu make sense to tell a story,” she said. “As consumers are beleaguered by ‘branding’ and desire more feature-based details, long-form content is an effective channel.”
In a study it commissioned recently, Hulu reported that 93% of users felt the site had the right amount of ads in exchange for free video viewing.
Other Hulu ad formats include overlays, clickable logos, branded canvases that occupy the page behind the video player and an ad selector that lets users choose the specific brand from an advertiser to watch.

73 Comments

  1. Are they watching the two-minute spots or are they tuning out for two minutes and then coming back to watch the shows uninterrupted? How is engagement being measured?

  2. As a user of Hulu, I can tell you that I do actually watch the long ad. I can also tell you that it’s always been one minute for me, not two. I do much prefer the single long ad over multiple shorter ads. In addition to being less time spent watching ads (one minute of a single ad versus one-and-a-half to two minutes of multiple ads), it means I can watch the show without major interruption (there are still short pauses of black screens when the ads would normally play… technical glitch that they need to work on). I’ve long been an advocate of the more European-style TV ad system — uninterrupted shows with blocks of ads in between.

  3. David poses a great question. While this form of advertising is still more effective than most, viewer engagement is still going to be an x factor.
    I tend to tune out for the 1-2 minutes that and ad is running. The onus is on the advertiser to create an ad is clever and creative and that will hold the attention of an audience for its entirety. Otherwise, its still throwing money in the wind…

  4. not sure that this saying that people want to view the 2 minute long form format, it’s just saying that people don’t want to have their viewing interrupted. statistics can be made to reach any conclusion. ask viewers if they’d prefer no commercials at all and see what they say 😉 I know I know, it pays for the content, but I’m just sayin’… :)

  5. Does the user get to pick the ad from a variety of categories? That would increase the likelihood that they actually watch it. If it’s a movie trailer I picked maybe I stick out the 2 mins, otherwise I am jumping to another Web page and coming back when my chosen show comes on.

  6. I’ve opted for the single longer ad every time. And this Thanksgiving, I’m grateful for online video players with volume controls! And even more thankful for ads that don’t BLAST the sound levels (compared to the content)

  7. I always go for the 2 min ad. Of course 2 min is about the right amount of time for a trip to the restroom, or fetching a beer from the fridge.
    Also need to agree with Richard that the ad volume is one of my fav. parts of the Hulu model. I HATE comcast advertising sound volume.
    Also (and this might be random happenstance) but last week I was given a couple of ads that were part of a series. That kept my attention. (although not enough for me to remember what product was being advertised) However I think that advertising is going to have to offer it’s own content in addition to that which it subsidizes, and series adds could ensure that people actually watch them.
    It’s a thought.

  8. not to burst Hulu’s bubble, I love the service, but people opt-in and then go read some article they are working on in another tab, and then move over to their blessed uninterupted viewing of 30 rock (or whatever).

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