Hulu Advertising: Is It the Right Choice for Your Digital Strategy?
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Pathlabs Marketing |
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December 7, 2023 |
Have you ever heard of Hulu? Founded in 2007 and operated by Disney, this OTT streaming service provides long-form video content (TV shows, movies, live streams) for users to consume on their internet-connected devices such as a smartphone, laptop, or CTV.
Hulu has resonated greatly with users over the years, making it the fourth most-watched streaming service worldwide and amassing 48.5 million paid subscribers across devices as of November 2023.
While Hulu continues to be a hit with its vast user base, it also presents a unique and exciting avenue for advertisers. This blog explores Hulu as an advertising channel and what features teams should watch for.
What Is Hulu Advertising?
Hulu advertising refers to serving paid digital ads to users on Hulu.
Most Hulu ads appear to users subscribed to the low-cost, ad-supported tier, with ads displaying within the streamed video content and general Hulu user interface.
To serve ads on Hulu, teams can take one of the following three approaches:
Hulu Self-Serve Platform
Teams can request to make an account in Hulu’s self-serve platform, Hulu Ad Manager, and if accepted, build, launch, measure, and optimize Hulu ad campaigns within the platform.
This is a common route for in-house advertising teams for a single brand.
Demand-Side Platform
Teams can use a demand-side platform (DSP), like The Trade Desk. The Trade Desk, in particular, brokers inventory packages and private deals with Hulu, allowing teams to build, launch, measure, and optimize Hulu ad campaigns within the platform.
This is the preferred approach for media execution partners and many agencies, as DSPs can offer additional data targeting, attribution, spend management, and other necessary features for successful Hulu media execution.
Direct Sales Team Engagement
Teams can directly contact Hulu’s sales team to negotiate a deal to reserve premium Hulu ad inventory. These deals are the least common and often pursued by large brands and agencies managing large-scale campaigns.
Types of Hulu Ads
Teams can field ads on Hulu in multiple formats; the following are most notable:
Standard Video Ads
Traditional video ads that appear between video content with a length of either 15 to 30 seconds. Many include a QR code overlay.
Interactive Ads
Ads that appear between video content to foster direct user interaction. These often include a QR code or microsite with video or image galleries that users can further explore. Teams often work with a 3rd-party partner to develop creative.
Cover Story Brand Placement Ads
Ads that display at the top of the Hulu browsing interface.
Binge Ads
Ads that appear more than once before, during, and after video content while users watch multiple episodes of a TV series. Teams can submit more than one creative and serve ads at a high frequency.
Ad Selector Ads
Ad experience where users select the ad they want to watch from two to three creative options from the same brand. If the user doesn’t choose, one of the ads randomly displays. This format puts an extent of control in the user’s hands.
Branded Slate
Title card ad that appears before video content. Normally includes text that says “presented by” and the sponsoring brand’s logo. Often accompanied by a voiceover.
Pause Ads
Ads that appear when a user pauses a show or movie; commonly include a QR code. These ads can be effective as they remain on screen for extended periods, increasing the duration of exposure.
Exploring the Pros and Cons of Advertising on Hulu
Pros
First-Mover Advantage and Disney Ownership
Hulu has been an early entrant in the TV streaming landscape alongside Netflix, giving the platform the advantages of a large user base, quality video content offerings, and experience as an ad space vendor.
Additionally, Disney’s management provides the platform with more legitimacy and a chance for growth, making Hulu a safer and more promising advertising option overall.
Multiple Ad-Buying Routes For Scale
Hulu Ad Manager has lowered the barrier for smaller brands previously unable to advertise on Hulu: now they just need to make an account and meet the minimum campaign spend.
More prominent brands, agencies, and media execution partners can still leverage the DSPs and partnerships they already have in place to advertise on Hulu. Those most ambitious can even work with the Hulu sales team to handle a direct deal. There is a route for everybody.
Unique Ad Formats
Hulu offers many unique ad formats, such as interactive ads, ad selectors, ad slates, and pause ads. These provide more engaging user experiences, increasing brand awareness and promoting more direct user action opportunities.
Targeting and Data Activation Opportunities
Advertising teams can target ads to users based on the data Hulu collects regarding their location, interest, program and genre preferences, etc. Teams can also activate first-party data lists and target Hulu ads to users who have previously engaged with their brand’s owned channels.
Cross-Device Capability
Hulu supports streaming across various devices, including CTVs, smartphones, laptops, and tablets. In effect, teams can be strategic, targeting users with ads at different times on their multiple devices to increase the number of engagement touchpoints.
Cons
Ad-Supported and Ad-Free Tiers
As of now, the majority of Hulu users subscribe to the ad-supported tier. However, it is possible that certain brands may struggle to reach their audience in the future because the majority reside in the ad-free tier.
Those in the ad-supported tier often see a high quantity of ads, which can cause ad blindness and fatigue. Teams must take steps to keep their Hulu ad creatives fresh and engaging.
Creative Development
Speaking of creatives, Hulu only serves high-quality, well-designed creative ad content. Teams must adhere to Hulu's strict guidelines and potentially invest additional time and effort in adapting to its unique and non-traditional ad formats.
Higher Price Points
Hulu's advertising costs tend to be relatively high. This pricing may be prohibitive for certain advertising budgets.
Limited Funnel Impact
OTT advertising on Hulu, particularly on CTV devices, tends to be a top-of-funnel, awareness-driven tactic. Achieving mid-to-bottom-funnel impact can be challenging and may require alternative strategies, like interactive ad formats, QR codes, or promo codes to promote offline or multi-device engagement.
How to Advertise on Hulu
The following are essential steps to complete when advertising on Hulu:
Build a Solid Foundation
Teams must create a detailed media plan before initiating any Hulu ad campaign efforts. This plan should articulate business and marketing objectives and explain the role of Hulu ads in achieving these goals. It should include an approved budget, target audience, scheduling flight dates, creative strategies, etc.
Select Buying Route
In-house advertising and marketing teams for small to mid-size brands will likely use Hulu’s Ad Manager platform; therefore, they must apply for access and set up their account.
For agencies and media execution partners running Hulu ad campaigns for clients, they must ensure their DSP is set up and any additional deals, packages, or accounts are in place.
Build Campaign
Within the Hulu Ad Manager or DSP interface, build out the campaign based on the media plan: input audience, objectives, budget, flight dates, devices, etc. Develop the creative (if applicable) and input in the platform. Consider opportunities for additional tracking, data activation, etc.
Execute and Optimize
Once the campaign is ready, launch and handle day-to-day management. Make optimizations accordingly, analyze and report on performance as needed.
Special Considerations When Running Hulu Ad Campaigns
Weigh reach and frequency – cast a reasonable net based on the ultimate objective while serving a given ad to each unique user in moderation to balance effective recall and ad fatigue.
Remember, Hulu takes a specific turnaround to approve creative.
Fully validate why Hulu is a prime channel to use; don’t use it just because of its hype.
Account for seasonality and pacing; OTT advertising can have higher prices at the end of the month, during peak seasons, etc.
How Much Does It Cost to Advertise on Hulu?
Minimum Spend Requirement
Hulu’s self-serve ad manager requires a minimum spend of $500 per campaign. The minimum spend for teams advertising on Hulu through a DSP will depend on the type of package deal they select. Teams ambitious enough to reach out directly to Hulu and negotiate a unique, direct deal can expect higher price points.
Hulu is highly sought after, so any team should expect higher costs overall, than other OTT inventory options.
Average Costs of a 30-Second Ad
The CPM for even a standard 30-second commercial ad will vary on Hulu based on the buy method, ad format, targeting parameters, etc.
Budget Optimization Tips
Account for Creative Development
Hulu’s creative guidelines are stringent, so it may require more resources and time to develop the best possible versions of creative.
Reserve Buying on Hulu for High-Impact Moments
Those with limited budgets who still want to advertise on Hulu should mainly leverage this channel during high-impact moments like holidays and major season events rather than maintain an always-on approach.
Explore Additional OTT Placement Opportunities
Beyond Hulu, consider advertising on additional OTT platforms. Look for opportunities to bundle other OTT publisher inventory with Hulu to broaden reach. A media execution partner can help agencies find the best OTT and Hulu advertising deals for their clients.
In Conclusion…
Hulu is an increasingly popular OTT streaming service, boasting millions of subscribers. Its ad-supported tier opens up a wealth of advertising opportunities, allowing brands to showcase their messaging amidst TV shows, movies, and live streams. Hulu's diverse ad formats, ranging from paid ads and branded slates to interactive ads and traditional commercials, offer advertisers a variety of ways to engage with their audience.
Whether utilizing Hulu's own ad manager, a DSP, or directly collaborating with the sales team, multiple avenues exist for effectively deploying ad campaigns on this platform. As Hulu continues to evolve, we can expect to see a mix of emerging benefits and challenges. While it offers innovative ad formats and a substantial audience, the costs can be high, and mastering Hulu's unique advertising landscape requires skill and strategic thinking.
Nevertheless, Hulu is a platform that should remain on the radar of advertisers and marketers, poised to play a significant role in the future of digital advertising.
