Hulu – Over 100 advertisers paying more… for less
October 30, 2008
Hulu is one company enjoying their success. With so many video sites struggling with the monetization and reduced staff sizes,Hulu is growing its business through traffic… and number of advertisers. Making its official debut only in March, Hulu is already the sixth largest video site with 6.3 million uniques in September (according to Nielsen Online). What’s more impressive is Hulu has attracted over 100 advertisers from ten advertisers in its soft launch a year ago. Consumers and advertisers have both bought into the concept.
Hulu has experimented with a lot of different advertising formats including buttons, pre-rolls, and mid-rolls. I get my regular fix of Arrested Development on Hulu and appreciate the elegance in their ad presentation. The other week, I opted to watch one full 2-minute infomercial type ad instead of a couple 15/30 second clips during the show. I’ll definitely give up time up front to get an uninterrupted viewing experience. Other times, I’m presented with unintrusive advertiser logos around the video player. Hulu is also testing their ad frequency and learned that by serving less ads, they’re able to get higher rates from advertisers. Simple econ 101 — decrease the supply to increase the demand. Increase demand = higher prices. Brilliant!
Not to discredit Hulu’s innovation in video ad products but Hulu also has the advantage of owning premium television and movie content. Hulu’s success with advertisers is due in part to its innovation in video advertising products and having strong brand affiliation with its TV and Movie shows. On sites like GoFish.com (with major traction 2007), it was still a lot harder to experiment and manipulate pricing because the advertiser demand in our semi-professionally produced video content was never really there. It was difficult enough just trying to sell a straight pre-roll ad campaign on GoFish.com… I can’t imagine any one of Hulu’s 100 advertisers agreeing to pay a premium rate for an experimental 2-minute infomercial on Hidden Celebrity Webcams at GoFish.com
Anyways, I’ll continue to follow Hulu closely as I’m only mid-way through Arrested Development’s second season.
