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Hulu is expanding its creative studio offering to woo D2C advertisers

Hulu's original programming includes The Handmaid's Tale

Hulu is looking to grow its advertiser base beyond the corporates by attracting newer, direct-to-consumer brands with an expanding in-house studio.

The OTT TV service has already instated a creative studio to support brands advertising on the platform, which offers US viewers both an ad supported and a more expensive ad free package. Now, the company’s senior vice president of advertising, Peter Naylor, wants to take that capability and “really blow it out”.

“We want to nurture and grow that [creative studio offering],” he told The Drum.

The SVP sees strong revenue potential from the growing D2C market – digitally native brands such as Casper Mattresses and Dollar Shave Club that market directly to their consumer base. Historically these companies have funneled their marketing budgets into social and digital but as the sector grows across all verticals, Naylor believes they will prove to be lucrative clients of Hulu.

“The next place they're coming to is video, so we can work with them because we're a D2C brand, too,” he explained. “[The creative studio] will help those small D2C companies who say, ‘I'd love to be on Hulu but I don't have a TV spot.’ We’ll say, ‘we'll help you make a TV spot’.”

“What I want to do is [run] that not only out of our headquarters in LA but kind of everywhere. If there's a small company based in Dallas, or Pittsburgh, we want to [give them] a creative capability. There's cool companies based everywhere right now.”

Naylor takes a long view on working with these companies, which are usually still going through the process of funding rounds. Much like London agency And Rising, which has pivoted its offering to work exclusively with Series B-funded clients, Hulu sees its relationship with the sector as an investment that will pay off as the developing brands begin to gain financial traction.

“You see a lot of these media companies cutting back on their advertising sales team but are expecting more from them, and they're only going to concentrate on big [advertiser] fish,” he said. “But there's a big market out there – we can take advantage of this. As far as I'm concerned, if you want to be in business with someone you've got to be willing to build the business.

"You've got to be willing to plant some seeds to grow your garden.”

Dollar to dollar

Hulu believes it’s the right platform to guide D2C companies from digital to TV not only because its platform straddles the two, and not only because it appears to be in a stable enough position to work closely with small-budget clients (“It's fun, we're growing, it's fantastic,” enthused Naylor. “We're having more fun in media than anybody right now.”)

The key, the SVP explained, is the data and insight that Hulu can provide to these attribution-obsessed companies. Hulu boasts that its inventory is 100% viewable – it only charges for ads that are fully completed – and its subscription model means it knows much more about the audience that’s watching than traditional broadcasters.

“D2C companies are trying to measure exactly what happens – cause and effect, dollar in, dollar out,” Naylor said. “That's what we do. We can talk in a very like minded way Why wouldn't you start with a digital TV [platform] with young viewers and an unlimited ad mode where you can measure everything? Why would you start with the one-to-many paradigm with an old audience that's not on demand and more cluttered?”

Hulu’s sell of its “unlimited ad mode” isn’t just limited to D2C clients. It’s also chasing the big dollars of corporates with its flexible inventory. Brands can submit ads of any length – not just the 15- and 30-second spots determined by broadcasting schedules – and can also build personalized, interactive and choice-driven spots into the Hulu platform.

Perhaps the most distinguishing of its offers is its brand integrations. Land Rover North America, for instance, recently partnered with Hulu Original ‘The First’ to feature a custom-built, futuristic Range Rover Sport in the show itself. Hulu additionally worked with the brand to develop three custom videos to promote the partnership.

“We want to do more and more of that,” said Naylor.

Scalability

The question remains over whether Hulu’s viewer base is large enough to attract brands to such complex and expensive deals. While its subscriber based reached 20 million in May, the service is still only available in the US, and there is no indication when this will change. Additionally, the breadth of its original programming is still weak in comparison to on-demand rivals such as Amazon Prime and Netflix, despite housing the critically acclaimed Handmaid’s Tale.

This is a crucial issue for one media planner, who asked not to be named.

“[Hulu’s] content needs to be unique enough for people to choose it over or next to Netflix, and currently it isn’t,” they said. “It’s all very well having great advertising options, but they need to be scalable.”

Noah Mallin, the head of experience, content and sponsorships at Wavemaker, also believes Hulu needs to up its original content game in order to move from being a “buddy platform” – one that a viewer would occasionally dip into as a supplement to the likes of Netflix – to a “primary platform”.

From a media buyer’s perspective, however, he thinks it’s still an attractive proposition – although noted that advertisers are more interested in the audience the platform provides rather than flexible advertising and commercial options on offer.

“You don’t want to just buy [ads on] Hulu – you want to look at them blended in with a total plan,” he said. “So from that perspective there’s enough scale to make it work given the concentration of the audience that they have.

“If you really want to tap into streaming with a platform like Netflix or Amazon, you can’t do this with ads. So [Hulu] becomes a really interesting way to get to that streaming-heavy audience with creative that doesn’t have to be bespoke. To us, that makes it very attractive because you’re getting a similar audience to what you would get theoretically if you were able to buy [ads on] Netflix.”

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