Hulu and other online video streaming sources offer many advantages to advertisers that TV advertising can't compete with. What long-term effects will this have for cable and satellite companies along with the advertising industry at large? Click image to visit Hulu's "Ad Experience" videos page.
I’m a big fan of Hulu and will be sad to see it transition to a paid subscription model next year. I think sites like Hulu are definitely the future. I love its que feature, which lets me subscribe to shows and emails me when they’re available on Hulu. It’s like free DVR, but web 2.0 style, without a hard drive and all the hassle that comes with it. In addition, navigating through the site is a cinch thanks to its great organization and the social media sharing versatility is a nice touch.
I especially like its advertising. A Hulu video is typically sponsored by one advertiser with 30-second commercial breaks instead of a plethora of commercials from lots of different sponsors. This appears to be the norm at network sites that also broadcast “made-for-tv” content also. The online model of exclusive sponsorship trumps tv advertising for many reasons:
- No competition
By being an exclusive sponsor, the advertiser isn’t competing for viewers’ attention with other ads. Plus the 30-second model doesn’t allow much time for a viewer to ignore the ad by doing something else. I imagine viewers are more likely to just sit through it than switch to some other media, run to the bathroom, call a friend, feed the cat, etc. Every online model I’ve experienced has a pause feature — something basic cable subscribers don’t have. And if a viewer pauses for too long, the sponsor usually gets an extra commercial thrown in when the viewer presses play again. - More narrative flexibility
There’s more flexibility and a greater allowance of creativity to create narrative with several commercials versus just one. Commercials with a story always make it to the Super Bowl. Just face it, we love them. (Some have went so far to say that our modern society even relies on commercial advertising to fulfill our human need for storytelling.) If a commercial has some sort of narrative involved, there’s also a greater chance the viewer will want to go to the sponsor’s site — perhaps to watch the final ending or interact in some other way. - Viewer-Selected Sponsors
I’ve often had the option to select among a couple different sponsors. If I have to decide between McDonald’s and Viagra, I’m totally going with McDonald’s. Not that I especially enjoy watching commercials, but since I have to watch them anyway, I might as well pick something I’m actually interested in. TV has always struggled with linking sponsors to viewers who are likely to be interested in their products and services. Sure, we’ll see more Buick commercials during Wheel of Fortune and Barbie commercials on Nickelodeon, but prime time broadcast is still a disorganized chaos of Gardasil, Yaz, Maybelline, Viagra, Lexus, Scottrade, and Priceline — all products or services I’ll either never buy (because I’m a dude) or can only dream of buying in about 30 years. - Built-in Web 2.0 Versatility
Sharing features, links to a Facebook Page, Twitter account, or frankly anything empowers the sponsor to present a more convincing action item. Whereas TV commercials encourage viewers to painstakingly A) find a computer, B) turn it on, C) open a browser and D) recall the URL and type it in the address bar to visit a site for more information, online commercials are one effortless click away. Viewers are already in an internet mood, because they’re already, you know — on the internet! If you’re a sponsor that sells insurance something nobody truly wants to buy (like insurance or identity theft protection), then you’ve done a swell job if you can convince viewers to click to your site. Perhaps they’ll check back later and give you a call. However, if you’re a nonprofit trying to raise awareness with an emotionally charged ad strategy, then I’d guess online commercials are much more effective at getting people to sign up for a mailing list and sending a word-of-mouth Tweets/Facebook status update. - More visibility Viewers would probably be upset if a giant Honda logo suddenly splashed across the TV screen at random intervals during a program, but we’re all a lot more comfortable with the adspace surrounding a video stream. I usually watch content in full-screen, but even when I need to pause or change the volume, the sponsor is there. Quietly of course.
I strongly suspect that there’s some top-secret spying going on, too. I wouldn’t be surprised if the content provider has probably got some sort of clue about viewers’ browsing histories, and this information is researched, analyzed, and then put to work linking ads with the most likely target audiences.
In the future, I would like to see locally-based small businesses get a piece of the online streaming advertising. I feel this should be relatively easy to do by exposing the ad to all IP addresses within a certain radius.
While Hulu may soon change its business model at the expense of its viewers, I predict online video advertising will prevail as an effective advertising model. Cable and satellite providers should be in the hot seat: it’s their bread-and-butter medium (TV) competing with this new form, which obviously has many advantages.
Then again, the cable and satellite providers are the one subscribers pay for internet access, so how much will a transition affect them? It gets complicated, but these companies want to force us all into internet “a-la-carte” subscription models, where we pay for social media sites like we already do for channels (ex: MySpace & Delicious comes on the “basic” package, but Facebook and Twitter are on the upper-tier package, and so on). Fortunately, there’s a lot of opposition against this and for more info, see Wikipedia’s article on Net Neutrality. If I ran Time Warner Cable or some other service provider, I’d launch a Hulu-ish site where subscribers of internet and tv services could access all of their TV content for free. Wouldn’t it be easier to join the wave than fight against the tide? Once one provider did this, the rest would probably follow suit.
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