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Coca-Cola, Procter & Gamble Will Test Hulu Ads for Viewers Who Binge, Stream and Pause

Many TV viewers realize they can’t get away from inevitable commercial breaks. Now Hulu thinks it has found a way to overhaul the concept for video-streamers, who no doubt thought they’d escaped such stuff.

Starting in the second quarter, Hulu will begin testing new kinds of commercials that surface on its screen whenever users decide to pause their video selection. The company hopes these “pause ads” will offer a new way to get advertising in front of a consumer base that has grown weary of traditional commercial breaks as they grow more accustomed to streaming services that do not run as many pitches as linear TV.

If successful, Hulu could connect advertisers to an extremely elusive target: the binge-watcher.

“While TV viewing behavior has changed, TV advertising really has not. We have largely been watching the same commercial breaks from the second that TV advertising began,” says Jeremy Helfand, vice president and head of advertising platforms for Hulu, in an interview. “There’s a real opportunity to change that.”

Two of Madison Avenue’s top residents will work with the video-streaming outlet to see if viewers will accept the new ads. Coca-Cola, which once used the slogan “the pause that refreshes” to great effect, and Charmin, the Procter & Gamble toilet tissue that offers succor during many breaks in TV viewing, will both take part in Hulu’s effort. The company intends to run “pause ads” for a period of a few months later this year, and hopes it will find out how consumers react to seeing static ad pitches surface as they stop the action at moments of their own choosing.

“Charmin is excited to be an official sponsor of the Hulu ‘Pause Ad’ because we know that brands need to reach their audiences at the right time with the right message. When someone pauses their program, it’s presumably because they are ‘going’ – it’s an extremely relevant place for our brand,” said Janette Yauch, Charmin’s brand director, via email. “This is a unique and unexpected ad experience” that can deliver a message ” in a way that is non-disruptive and user-initiated, and we’re glad to be a part of this new innovation.”

Hulu has reason to find commercials that its subscribers will embrace. Half of its top 100 selections are consumed via binge-watching, says Helfand, which the company defines as three or more episodes played in a single session. To succeed, he says, commercials need “to be less interruptive and more relevant.”

Hulu’s efforts are likely to be scrutinized as more media companies move more decisively into streaming. Walt Disney’s ESPN already has a subscription broadband service and the company is slated to launch a broad streaming outlet with its Pixar, Disney, Marvel and Lucasfilm brands later this year. AT&T’s WarnerMedia is also expected to debut a streaming service in 2019. Comcast’s NBCUniversal intends to launch an ad-supported option in 2020.

Comcast, 21st Century Fox, Disney and AT&T are investors in Hulu, with Fox’s stake expected to transfer to Disney when those companies transfer a chunk of Fox’s assets to Disney sometime this year.

Hulu has spent months trying to refine the new format. Concerned that users might want to pause a program to rewind, fast-forward, or even change settings on the service, executives opted to wait five seconds between the initial pause and the time a commercial appears on screen, Helfand says. The ads are static, offer only a short message and a small picture, and are delivered on a translucent backing so that content and on-screen prompts remain visible throughout, Helfand says. User surveys found a desire for subtlety and little interest in having a video show up whenever streaming stopped.

“You really just have a few moments” to deliver a message before the viewer will follow through on whatever drove the impulse to pause, says the executive. “It’s more like a driving by a billboard, where you need to get out an effective message out very succinctly in a short amount of time.”

Hulu has leeway to test commercials that rivals like Amazon and Netflix do not. Hulu offers different subscriptions, with a higher-priced one available to those users who don’t want to watch commercials at all. At present, Netflix does not run ads on its service. Amazon has allowed banner ads to appear on selection screens and run some video commercials during its streaming of “Thursday Night Football.” Both services have allowed product placement in certain series.

The company already has bigger ideas for its in-pause pitches. Viewers may tolerate only a short message during breaks, says Helfand, but there could be an opportunity to see if they will interact with the pause and toggle over to a deeper experience that could even include a transaction. Still, Hulu will need to study its new pause before it can really get going to other ideas.

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