In Depth

Hulu Finds Viewers Will Watch Ads When They Have a Choice

One Long-Form Ad in Lieu of Scattered Breaks Is Popular Option, Study Reports

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.

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.