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Hulu unveils binge ad format in quest to prioritize ‘non-traditional’ ad model

By Andrew Blustein, Reporter

May 1, 2019 | 5 min read

Streaming giant Hulu is doubling down on its viewer-first approach to advertising.

Hulu original The Handmaid’s Tale is returning for a third season this June

Hulu original The Handmaid’s Tale is returning for a third season this June

After launching a beta version of pause ads earlier this year, Hulu announced today at its IAB Digital Content NewFronts that it will introduce a binge advertising experience in the fourth quarter of 2019.

Hulu’s head of ad sales, Peter Naylor, said binge ads will “reward viewers” who are binging content with situationally relevant ads. Hulu defines binging as watching three or more shows of a series in a single sitting.

According to the company, Hulu will share what binge ad creatives will look like later this year.

With binge ads, brands can fit messages for situational viewing, which can include anything from offering a viewer to watch the next episode ad-free to a personlized offer from a brand. Hulu will open up binge ads to all advertisers in 2020, according to the company.

During his presentation, Naylor said Hulu’s goal is to have half of the company’s ad revenue eventually come from non-traditional, non-disruptive ads. He also said that pause ads – a branded overlay on paused content – will be open to all advertisers by August.

Hulu will also limit ad pods to 90 seconds and set a daily frequency cap. Viewers can now see the same ad only four times in a single day.

Hulu’s head of ad platforms Jeremy Helfand told The Drum that Hulu’s viewer-first strategy centers around a “belief that advertising in a streaming TV environment needs to be consistent, it needs to be relevant, and it needs to be integrated”.

He said Hulu’s 2019 ad formats roadmap will include building out its request-for-information units, which integrates shopability into an on-screen ad.

“There's an opportunity to continue to build on that lower-funnel-objective ad format [to] potentially engage [viewers] in a way where they don't have to leave their storytelling journey with content for a long period of time. They could, through the click of a button on a remote, push additional information to their mobile, or to a save-you-later environment, like email,” said Helfand.

New originals

Hulu’s subscriber base has climbed to 28 million and, according to ComScore, reaches 58 million ad-supported viewers.

To further serve these subscribers – and a host of advertisers – Hulu unveiled a slate of new original content.

Hulu and Disney-owned Marvel are launching two new live-action series. Hulu will also soon offer Disney+ and ESPN+ as add ons. Disney owns 80% of ESPN and roughly 70% of Hulu.

Hulu also partnered with Vox Media Studios, chef David Chang and celebrity Chrissy Teigen to launch food-related content under Hulu Kitchen. Hulu and Teigen also inked a two-year deal to create other original programming.

Some new Hulu originals include The Dropout, with Kate McKinnon as Theranos chief executive officer Elizabeth Holmes; Nine Perfect Strangers with Nicole Kidman; Catch-22 with George Clooney; and animated series Solar Opposities from creator Justin Roiland.

Hulu also works directly with brands to integrate into their original programs. Hulu's vice-president of integrated marketing Nicole Sabatini told The Drum that brand integration is a key part of Hulu's push to deliver non-intrusive ads.

"Integrating brands into shows is definitely a way we know delivers that need," said Sabitini. "We have a team of people who work directly with our studio partners on our originals to ensure that we find the right moment to do that, and the right brand, where it feels additive to the story and very organic. We're strategy, development, production, execution, the whole thing."

Condé Nast, as it grows out its original digital video offering, has also taken to product integration with its Prime Placement offering as marketers look for highly visible, brand-safe content.

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