Despite the fact that YouTube is the granddaddy of all things online video, Hulu’s ad impression rates are much better than YouTube’s, and every other web property in the industry.
It’s not just that Hulu has more ads in play or that it has more premium content than other networks, it’s the way Hulu envisions consumer targeting that is a primary driver of its success. Hulu uses ad personalization and full-screen takeovers effectively to get its 27 million subscribers clicking on the 1.2 billion ads served to them. Hulu users have to click and choose an “ad experience” from an in-player popup in order to watch a program.
Embedding a call-to-action in a display ad is common, but tying it to a mandatory choice according to a visually based affinity is not. The coercive nature of having to watch an ad is mitigated by a user being able to choose from several screenshots what they want to watch.
Hulu’s vision of consumer targeting allows users to create the audience segments that they want to be placed in to be served ads. It takes much of the guess work out of pre-roll or display advertising. Because Hulu ads are very short — typically 15 seconds — it is highly unlikely that consumers typical ad avoidance would occur.
Hulu last year doubled its ad revenue to $240 million, and is expected to grow at a faster rate this year. Hulu’s business model may be up for debate, but its employment of user-choice is an object lesson for brands seeking to optimize their ad spending.