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Hulu Readies New Ad Formats for Virtual-Reality and Binge-Watching

Hulu subscribers watching “The Mindy Project” may have seen something that looks a lot like the show, but really isn’t. It’s a commercial from Volkswagen that uses scenes from the Mindy Kaling-produced series and mixes them with a promotional message from the automaker.

“It’s a spot that can run not just in ‘Mindy,’ but in front of other audiences who are watching similar comedies, or people we know who have watched ‘Mindy’ in the past,” says Peter Naylor, senior vice president of advertising at the streaming-video site, which is owned jointly by Comcast’s NBCUniversal, 21st Century Fox, Time Warner and Walt Disney Co. “People come to us so they can learn some new plays.”

As Hulu bids farewell to “The Mindy Project” – the series finale surfaced on Hulu earlier this morning – it hopes to drum up new business among advertisers eager to test the waters of streaming-video. Netflix doesn’t take traditional commercials and Amazon only runs them in limited fashion. But Hulu, the offspring of traditional TV companies, hopes to catch Madison Avenue’s eye with offers of new commercial formats that can be distributed to select cuts of audience based on program choices and other behaviors. Advertisers who sense a couch-potato migration from living-room TV to mobile screen might have interest.

When it launched in 2007, Hulu offered new ideas about how to advertise alongside video. It ran fewer ads than TV networks, and even let subscribers pick the type of commercial they wanted to see. There’s some hopes among traditional TV executives they can adopt similar tactics. But Hulu isn’t resting on past innovations. “There’s a desire to find new ways to reach audiences who have the control to avoid ads and conventional television,” says Naylor.

Hulu aims to offer ads aimed specifically at people in the midst of binge-viewing; ads woven into new virtual-reality programming; and ads keyed to specific occasions, such as the premiere of a new series. The company is making its pitch as advertisers are showing more interest in courting streaming-video subscribers and as it has ramped up production of its own original series.

Hulu is also in a bit of flux itself.  Mike Hopkins, who had been CEO, recently left the company to join Sony Pictures Entertainment. He is being replaced by Randy Freer, formerly the chief operating officer of Fox Networks Group.

Hulu has enlisted two marketers to sponsor a new virtual-reality offering it expects to launch next year. As users watch “Door No. 1,” a story about a high-school class’ ten-year reunion, they will be able to choose the way the plot unfolds. And as part of the story, they will see Nissan and the dating-app Bumble show up in the storylines, says Nicole Sabatini, vice president of integrated marketing at Hulu.

“It’s a unique opportunity to reach a very specific type of audience – a more influential audience that is looking to try the newest content experiences,” she says. In the program, two characters will end up matching on Bumble and meeting up at the reunion, says Andee Olson, the company’s director of content strategy. “They don’t really remember each other from high school,” she explains.“I would imagine that happens in real life.” Finding ways to accompany video consumed via digital means is important to the company, she says. “Our audience in general seems more prone to the digital side of advertising.”

Discover Los Angeles, part of the Los Angeles Tourism & Convention Board, has moved all of its advertising to digital video, notes John Boudouvas, the  unit’s vice president of marketing. It will run two 30-second ads that accompany Hulu’s new program, “Runaways,” which features Marvel characters. Actors from the program will appear in the commercials, says Boudouvas, and talk about the many different people who live in the area.

The marketer had run ads on local TV in the past, he says, but “it’s not only more expensive, it’s harder to reach a target audience, and that’s really what we are looking for.”

Hulu is currently exploring ways to get advertisers to tell a story in multiple segments over the course of a viewer’s specific binge experience, says Sabatini. “Viewers could get pieces of the story as they are watching multiple episodes,” she explains.  As more video consumption takes place via streaming, Hulu’s new ideas could become mainstream ones embraced by multiple players in the not-too-distant future.

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