Ad-Free Hulu is Bad for Video Ads

By Brian Morrissey • August 2, 2011 •

Hulu Going Ad Free: It is interesting to see how modern digital media companies build business models. What’s clear is that most are not going to make the mistake of relying too much on advertising. Spotify seems like it is hell-bent on pushing its users to its subscription options, while keeping the ad-supported tier as a testing ground. Hulu up until now has remained staunchly an ad play. It has won a big chunk of video ad budgets for its dynamite content and clean environment with relatively low ad loads, although it has cranked them up recently. But Hulu might tack away from this direction. GigaOm reports that the video service is mulling an ad-free option. This would be great news for consumers who are fed up with sitting through more and more ads. Many would rather simply pay rather than pay with their attention. But it could have a chilling effect on the online video ad market, where Hulu has been the leader in quality. Without Hulu, the Web video ad market starts to look a bit scruffy.

Ad-Tech Gibberish: I noted yesterday that ad tech has an alphabet soup problem. Some disagree, saying that the notion is insulting to the savvyness of clients. Maybe, but there’s no doubt that it’s a full-time job keeping up with shifting definitions and terminology in advertising technology. Sometimes entire new boxes on the Luma Partners slide appear to pop up over night. Scott Howe, a digital veteran of aQuantive and Microsoft, thinks much of this is “gibberish.” As the new CEO of stolid data giant Acxiom, he wants to “cut through the clutter and be the trusted guide as opposed to the latest whiz-bang technology.” Acxiom is in an interesting position to do that. Unlike many of the new players who are often forced to jump from innovation to innovation, Acxiom has a long track record with clients — and the trust that comes along with it.

The Next Web-Privacy Uproar: There’s been a regular refrain in the online ad industry that consumers who are really sensitive about their privacy simply delete their cookies. Many do this regularly, causing headaches for Web tracking. But it turns out a group of publishers and networks are taking no for an answer. They’re instead employing persistent cookies that respawn themselves after they’ve been deleted. A new report identifies Hulu as a participant in this practice. No matter the particulars, this is bad stuff. The industry seemingly has avoided the most onerous regulations debated when it comes to tracking. These kind of issues tend to come down to trust. The practice of reconstituting cookies when they’ve been deleted — no matter the reason — is a bad idea all around. Sometimes the online ad industry is its own worst enemy.

Fun Campaign of the Day: Samsung and Intel have a fun social campaign that gives away a laptop and $10,000 in gold in a game using tweets to crack the code guarding the prize. The random tweets generated are sure to drum up interest in the site. http://tweetcracker.com/

Twitter’s Bathing in Money: You have to hand it to Twitter. There are plenty of reasonable concerns about its business model and sustainability, but it can certainly talk the talk with investors. The social service is closing a funding that will inject an astonishing $800 million into it. It’s interesting to see how Twitter’s valuation completely disconnects with the growth of its business side. Twitter has tip-toed into the ad business, moving incrementally at best, while its other source of income in the form of data-licensing fees has shown turbulence with the loss of the Google deal.

Ad-Free Hulu is Bad for Video Ads

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