With AT&T becoming the most recent player to hop on the streaming service bandwagon by announcing plans to launch its own service next year, the over-the-top television (OTT) space is getting more crowded than ever.
But Hulu is not worried, and thinks it is well-poised to take on competitors like AT&T, Netflix, YouTube, and Disney, not just for consumers but also advertisers.
“We actually see brands getting more and more interested in advertising with Hulu,” Kelly Campbell, Hulu’s chief marketing officer, told Business Insider in a recent interview. “Our ad revenues have grown tremendously in line with our subscriber growth.”
While Campbell declined to give specifics, Hulu announced that it had surpassed $1 billion in advertising revenue in early 2017. It is expected to continue on this upward trajectory, reaching $1.4 billion in ad revenue by 2020 according to eMarketer, a forecast of double-digit growth for the service.
That is not incidental, said Campbell, as Hulu is in “a unique spot,” at the intersection of everything happening in entertainment and technology. And there are plenty of options for brands to choose from, she said.
In its pitch to advertisers, one of the things Hulu emphasizes is its ad-supported offering. While the company also offers an ad-free version, over 60% of its on-demand consumers end up choosing the ad-supported version. While that may partly be because it is $4 cheaper than its ad-free version that costs $11.99, Hulu views it as a sign that consumers are willing to engage with ads.
“You’re reaching consumers who have chosen an ad-supported product, which I think is pretty unique when it comes to both television and digital advertising opportunities,” she said.
Hulu is indeed in a good position, offering an avenue for brands looking to run ads against TV-like programming at a time when rivals such as Netflix and Amazon Prime Video have remain ad-free. It is also an appealing alternative for advertisers at a time when linear TV-viewing is in decline, and platforms like YouTube and Facebook come under fire for brand safety issues.
But Hulu offers far more than just creative in the form of 15 or 30-second long ads, she pointed out, such as brand integrations with its shows.
“We can literally do anything,” she said. “So for a brand, it’s like a playground. They come in and we can start brainstorming on ways to reach Hulu consumers, both through our platform but also through our content.”
One example that Campbell highlighted was a branded integration that ride-hailing company Lyft did with the show “Marvel’s Runaways.” During the shooting of the show’s first season, Hulu’s team realized that the actresses and actors on the show were coming to work in Lyft every day, which screamed for a collaboration. So Hulu ended up integrating Lyft into the actual content of the show as well as its premiere.
“It was a way for Lyft to really connect with their consumer in a unique and different way, that they can’t do anywhere else,” said Campbell.
Another way that Hulu has attempted to differentiate itself recently is by announcing that it would run ads even on offline programming at the NewFronts this year — an industry first among video streaming platforms. While some were not entirely convinced, the idea is that being offline actually makes ads more effective, as it eliminates many of the distractions that come with an internet connection.
As Hulu’s subscription base continues to swell, expect advertisers to follow. As of May, Hulu said that it had more than 20 million paying subscribers. Plus, a recent study from online-streaming guide Reelgood found that Hulu is the dominant streaming service when it comes to television.
Watch the full interview here.