Hulu CEO Mike Hopkins: Service Will Grow Ad Share With Better Measurement

Hulu CEO Mike Hopkins said the streaming-video site will turbo-charge its advertising business once there’s third-party measurement at scale.

At the same time, Hopkins, speaking at the Paley Center for Media’s 2015 International Council Summit Friday in New York, pointedly noted that the lack of independent measurement hasn’t stopped the likes of YouTube and Facebook from capturing millions in ad dollars. “Their lack of Nielsen or comScore measurement hasn’t slowed them down,” he said.

GroupM chairman Irwin Gotlieb, who appeared on the panel with Hopkins, said he was confident the industry would solve the issue of third-party measurement for digital, as well as develop better targeting and personalized messaging.

“The reason (more) money hasn’t flowed to Hulu… is because the data doesn’t come from a third party,” Gotlieb said. “We will find ways to get the data properly conjoined.”

The issue of measurement is complex, Gotlieb said, but the good news is that “if was easy, (clients) wouldn’t need us.”

Hulu’s views have increased 85% year over year, and now nearly 70% of the service’s viewing now takes place in the living room on connected TVs, according to Hopkins. “Customers are watching on the best device possible,” he said.

“At this moment, we’re trying to be very aggressive in terms of driving new business,” Hopkins said. Hulu’s revenue today is about 50-50 from advertising and subscriptions, with subscriber fees likely growing to be the majority.

In September, Hulu launched a commercial-free plan at $11.99 monthly, in addition to the $7.99 subscription tier that includes ads. Hopkins said it was critical to offer customers that option, and claimed the move immediately quelled the chronic gripes about the ad-supported SVOD service.

“Almost overnight, complaints about advertising stopped because consumers know the bargain,” Hopkins said. Most customers have remained on the $7.99 plan, he added.

Compared to traditional TV advertising, Hulu is able to deliver one-to-one ads that reach specific demographics — something the television business has tried to crack for decades. “Finally, with the two-way infrastructure (of the Internet) we can do that,” he said.

Gotlieb said GroupM is testing new ways to target advertising across multiple platforms, such as real-time targeting of ads on second-screen devices (like smartphones) that sync up with TV spots. “What’s happening today is just the tip of the iceberg,” Gotlieb said.

Hopkins, who was named Hulu’s CEO in October 2013, said his first order of business after he joined the company was to rebuild the ranks of senior management: “The team had pretty much left at the end of 2012,” he said.

In addition, over the last two years, Hulu has hired about 300 people, primarily in technology and product areas, and has invested in advertising technology. Hopkins also called out Hulu’s boost in spending on content, including exclusively licensed shows like “Empire” and “South Parks,” and originals such as the forthcoming “11.22.63” from JJ Abrams based on the Stephen King best seller.

Hulu is jointly owned by Disney, 21st Century Fox and Comcast’s NBCUniversal. Time Warner has been in talks with Hulu about taking an equity stake in the Internet TV venture, according to a Wall Street Journal report last week.

(Pictured, from left: Irwin Gotlieb, Mike Hopkins and moderator Jack Myers.)

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