Hulu aims to sharply cut reliance on traditional ad breaks

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A scene from 'Urn,' one of eight short films competing for $10,000 in a 'Huluween' competition hosted by Hulu. The streaming service is pulling together Halloween-themed content into a hub that bakes in sponsorships, part of a broader plan to create ad revenue from things other than commercial breaks.
A scene from 'Urn,' one of eight short films competing for $10,000 in a 'Huluween' competition hosted by Hulu. The streaming service is pulling together Halloween-themed content into a hub that bakes in sponsorships, part of a broader plan to create ad revenue from things other than commercial breaks. Credit: Hulu

Hulu is aiming to generate 50 percent of its advertising revenue from non-intrusive ad formats by 2021, up from less than 10 percent now, according to Peter Naylor, who leads ad sales for the streaming video platform. To get there, the company says it will lean more on cultural moments and seasonal events as it assembles sponsorships that create ad opportunities beyond commercial breaks.

Its biggest effort yet along those lines is this year's "Huluween" promotion, in which the company is packing Halloween-themed content such as the new Jason Blum series "Into the Dark" into a hub where advertisers can integrate their brands.

Traditional TV has long played up seasons and holidays in programming, promotions and sponsorships. But that's not as easy for so-called over-the-top streaming platforms that lack a communal live feed.

"A lot of OTT and on-demand environments, you don't have a sense of time because it is mostly library content," Naylor says. "With Hulu, you have a sense of time since we get last night's TV the next day."

Nine marketers or brands are currently sponsoring Huluween, including Papa John's, Mars, Sony Pictures, Safe Auto, Paramount, Universal, Activision's "Call of Duty" and Jagermeister. Hulu is helping them create content that will live inside of the Huluween ecosystem and use of the company's various ad formats beyond typical 30-second spots.

"We need to recognize with consumers being fully in control and avoiding ads if they want to, we need to innovate around new formats that are as non-intrusive as possible," Naylor says.

Jagermeister is using Hulu's ad selector product to serve viewers a selection of tarot cards. Different cards display different drink recipes and recommendations for Huluween content.

And to promote Sony's "Goosebumps 2: Haunted Halloween," Hulu integrated the movie's main character, Slappy, into its Huluween hub. Slappy appears along with a "brought to you by 'Goosebumps 2: Haunted Halloween'" message in short Halloween tutorials, on pumpkin carving for example, that were created by Hulu.

Hulu has been working more closely with advertisers over the past few months to help create promotions and ads with links to programming. For the debut of its original series "The First," Hulu worked with SunTrust Bank to create a commercial tied into themes from the show, which is about five astronauts working to be the first to go to Mars. The 30-second ad features a girl fascinated with space who grows up to be an astronaut.

Land Rover also worked with Hulu to integrate a futuristic version of its Range Rover Sport into the series, which takes place in 2030.

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