Hulu Experiments With Video Ads, Gets It Right

The isocket team doesn’t pay for TV service, so we’re trying to live off what’s available online. Most of the big networks put content up that you can watch for free. I’m sure you’ve been to or at least heard of Hulu.com, one of the big TV show websites.

The online shows maintain the commercial breaks built into the programs. Each commercial break shows a 15 or 30 second long video ad, usually from tech companies like RIM / BlackBerry.

When I wanted to watch a Firefly episode, Hulu asked me if I’d rather see a 2 minute long ad and then be commercial free for the full hour, or have the normal 15/30 commercial breaks. It even told me what the “extended” ad up front would be: the extended version of the Tina Fey / Martin Scorsese American Express Airport Lounge bit.

I chose the Tina Fey ad. I actually watched it and can recall the bit a full day later. I’m even compelled to share it with you…

Here’s the point: Hulu is doing something old broadcast media would never do. They experimented. They reduced the overall ad time in an already reduced format. Old media would never think “by reducing the amount of commercial seconds we can sell, we’ll be able to make more!”.

And it worked with flying colors. If RIM knew how effective that was, they’d pay more than they likely did. But since buying ads on a canceled TV series shown for free on the web is still considered “emerging”, RIM probably got a great deal.

There’s more than one economic model when it comes to buying and selling advertising!

The Deck banner ad network is another example of a group who decided to limit total inventory to one ad per page. They charge a higher price for that one ad spot compared to other networks because they believe that one single ad has more impact than 10 ads per page. What do you think?

Remember that even within a tighly defined target audience, every single person is different. Giving your audience choices and experimenting is one thing you can do to be a smarter marketer.

Tagged as: Advertising, good example, hulu