Hulu Hopes to Make Ads Part of Your Binge Session

If you just can’t keep yourself from watching another episode of “The Handmaid’s Tale” or “PEN15,” then Hulu has an ad for you.

The streaming-video hub is starting a trial run of new commercials aimed specifically at binge-watchers, which the company defines as subscribers who watch three or more episodes of the same series consecutively. Over the course of a three-episode session, a specific ad in the last commercial break of each of the first two episodes offers humorous commentary from Hulu and a specific marketer, and acknowledge that a binge session has begun. Then, just before the third episode,  the advertiser will offer a reward, such making that next episode commercial-free, or a promotion of some sort.

“We are not stopping you from doing what you want to be doing,” says Jeremy Helfand, vice president and head of advertising platforms at Hulu, in an interview. “You understand the brand is helping to bring you the content.”

The new format represents the latest attempt to devise commercials for a venue that many users have turned to in an effort to see fewer of them – and, sometimes, none.

A rising generation of video watchers has grown accustomed to plowing through multiple episodes of series from Netflix and Amazon Prime without having to see ads of any sort. That in turn has intensified a growing dislike of the traditional TV model, which hinges on the delivery of 30- and 60-second ads in regularly scheduled commercial breaks to help defray the costs of providing glitzy TV series on networks ranging from CBS to ESPN.

And yet, there’s a growing sense that streaming-video outlets can’t go ad-free forever. Hulu has long offered an ad-supported tier, as has CBS All Access. Many new streaming outlets, like Pluto, make no secret of their use of advertising. Even Netflix and Amazon have found ways to bring marketers into the mix: Amazon sells interactive banner ads on its Amazon Fire interface and Netflix recently turned to Madison Avenue stalwarts like Coca-Cola to help draw attention to its popular series “Stranger Things.” Laura Needham, a media analyst with Needham & Co.. on Tuesday predicted Netflix could require an ad-supported tier if it wants to continue to keep its position in the market as rivals like Walt Disney and WarnerMedia launch their own streaming-video services.

As Hollywood’s so-called “streaming wars” ramp up, many companies may require ad revenue to help support their need to create more content. “There is probably a hybrid model coming that balances subscriptions and ad support,” says Tim Hanlon, CEO of Vertere Group, a media and advertising consultancy.

Yet streaming viewers won’t tolerate the same kind of commercial interruptions they see on linear TV. Instead, says Hulu’s Helfand, streamers need to come up with ways to dovetail ad messages with new audience behaviors. Hulu has already unveiled a new ad format that surfaces whenever a viewer chooses to pause their watching. Now, he says, finding a way to weave commercial messages into binge sessions is of growing importance.

Hulu says nearly 50% of the ad-supported hours streamed on its service are watched in binge sessions. Citing research from Deloitte, Hulu says 75% of U.S. consumers say they binge their favorite programs.

The streamer has teamed up with Publicis Media, the large ad-buying firm, in an exclusive six-month pact to test the binge-watching promotions. Beam Group’s Maker’s Mark bourbon, Georgia-Pacific’s Sparkle paper towels and Kellogg’s Cheez-Its are the first three advertisers to run commercials as part of the agreement, says Hayley Diamond, executive vice president of U.S. digital investment at Publicis Media, and other clients are expected to take part in weeks to come. “Our clients always want to be where the consumers are, and want to place their ads somewhere they feel is natural to the environment,” she says in an interview. Hulu will offer the new ads to other advertisers in 2020.

Kellogg hopes to convince Hulu viewers to consider Cheez-It as an accompaniment to binge-watching. “Engaging with, and rewarding consumers, during a marathon entertainment session allows us to be an intrinsic part of this unique snacking occasion and taps into the thrill TV fans have when they’re racing through their favorite shows,” says Gail Horwood, chief marketing officer, Kellogg’s North America, in a prepared statement. Meanwhile, Georgia-Pacific feels the new Hulu ad format “is grounded in our consumer’s evolving media behavior.” says Jason Ippen, vice president of integrated brand building at Georgia-Pacific, in a statement.

Hulu’s new idea isn’t too far removed from the days when advertisers would try to tell a longer story over the course of several commercial breaks. Procter & Gamble in 2004 launched a new concept it called a “show-mercial.” Over the course of Friday-night primetime movies shown on the Lifetime cable network, the consumer-products giant aired two-minute segments during commercial breaks that told the stories of 13 different women getting”Glam Squad” makeovers with P&G health and beauty products. Tp see how it all turned out, viewers had to keep watching the program.

More advertisers will seek to enter the streaming fray. “There are a ton of new advertising opportunities enabled by streaming services, that are more creative and more consumer friendly,” says Hanlon, the consultant. ‘They allow marketers to be part of a solution – and it doesn’t piss off the consumer with something like seven ads in a row.”


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