This morning, at the 2019 Digital Content NewFronts, Peter Naylor, SVP and head of advertising sales at Hulu, laid out the company’s goal of having half of Hulu’s ad revenue come from non-disruptive and non-traditional formats over the next three years. To do that, Hulu is directly targeting streaming behavior, from pausing shows and movies to binge-watching.
According to Naylor, there are 58 million ad-supported viewers on Hulu, 21 million of whom are cord-cutters or cord-nevers.
“These are the people you’re not going to reach with your conventional TV investments,” Naylor said. “These are the most elusive and therefore most valuable viewers.”
A new way Hulu is reaching those viewers is through its binge advertising experience. Starting in Q4, the binge ad format will identify binge-viewing behavior on Hulu (watching three or more episodes of the same show in one sitting) and allow brands to serve personalized rewards, which can be anything from the next episode commercial-free to a discount offer on a product or service.
That product or service can also be offered through Hulu’s newly announced Friends with Benefits program. Part of this feature will be Easter eggs hidden throughout the site that unlock special offers from Hulu and brand partners. For example, there could a title card for what you think is a new show called Denim Blues, but when you click on it, it’s actually an offer for a shopping spree courtesy of Old Navy.
Hulu is also doubling down on another frequent behavior of streaming: pausing. There were more than 1.1 billion pauses on Hulu’s ad-supported accounts every month. To capitalize on this, Hulu launched in beta its pause ad feature earlier this year that allows brands to advertise on the paused screen of a TV show or movie. And now Hulu is rolling the feature out to all brands in August.
In addition to binge and pause advertising, Hulu is aiming to keep ads as fresh as possible for viewers by instituting wider-ranging frequency caps. Currently, no ad will appear more than two times per hour. Hulu announced at the NewFronts that it’s expanding that to a daily frequency cap so no ad will run more than four times a day per viewer.
“This is a monumental time for Hulu’s advertising business and for brands who are looking to reach the most valuable audience in television,” Naylor said. “Because of our viewer-first advertising principles, we’re scaling rapidly. We’re offering advertisers the most sophisticated targeting, the largest addressable footprint in on-demand television, robust measurement solutions, and new ad models. Hulu is future-proofing TV advertising and transforming the way brands connect with consumers.”