Hulu ad rates become higher than tv ad rates | Hacker News Reader

Hulu ad rates become higher than tv ad rates

bloomberg.com

46 pointsquizbiz16 comments

Am I the only going, "duh?" It was only a matter of time. I can things of a few reasons why web ads are more expensive:

1. People actually watch the web ads. They're only 15-30 seconds, so you don't have time to get up, use the bathroom, grab a drink, etc. It's a trivial amount of time that provides little opportunity to do anything else.

2. How many people watch the ads is more statistically trackable on the web. Who knows how many people are watching the Simpsons when it comes on? Someone could have just left the cable box on, someone might watch it through an antenna, a bunch of people could be watching it from the couch or one guy could be on the couch. How many people watched this show on Hulu? Well, we had 34,746 streams within the past week, and an overwhelming majority of them are probably one person at a computer.

3. You can decide if you like or dislike the ad. Ad companies can now be sure that they're not wasting money advertising Viagra to a teenager.

4. Hulu is insanely popular. It's one of the top-trafficked streaming websites last time I checked TechCrunch. People actually WANT to watch the show they're looking for, which, when joined with point #3, means the ads are even MORE tailored to the consumer. Convincing you to buy something you're already kinda interested in is way easier than selling ketchup popsicles to a woman in white gloves.

Summary: Web TV is finally getting the attention it has always deserved (since broadband became feasible for the majority of America, anyway).

It's definitely obvious - I agree. It's only a matter of time before this model becomes prevalent. The next milestone is for Hulu to reach critical mass. The networks still make much more money with cheap, high-volume ads from the millions of TV watchers in the U.S. that haven't switched yet.

An important step would be moving outside of the American market.

Currently, major content producers sign deals with local TV stations in non-USA areas of the world. There is no reason Hulu can't stream to other areas, so at some point it may become easier or cheaper for Hulu to operate in a region instead of the local TV station?

They can also target the ads more precisely. Like it or not, there's a lot of data on a lot of people out there that exists solely for doing things like that. All broadcast TV has is context.

The rate per ad is higher, but the number of ads is much lower, so ad revenue per show is still lower on Hulu.

-- “The reason people are paying such a high premium for these ads on the Internet is they do have a captive audience,” Poltrack said. “You know you have eyes on the screen.”

Yes... watch... I certainly don't have another tab open that I read for the duration of the commercial... though I will concede I at least hear the ad which is indeed more attention than any other ad delivery gets from me right now.

However, for how long will this last? How long before they start sticking two ads in, then, shortly after that, a race to get right back to where we are today, only this time without the DVR? When first you see two ads in a single Hulu break, you'll know the end is near.

Hulu has been doing a pretty terrible job with ads, at least in my personal experience. Quite often there will only be one (or maybe two) unique ads that play during an episode - the same ad over and over, 2-6 times.

Also, one suspects they must not be selling much of their ad time - the above plus the fact that 50%+ of the ads I see are "public service announcements", which I would expect they run only when they have nothing else they can run.

> In April, Burbank, California-based Disney acquired a 27 percent stake in Los Angeles-based Hulu for about $35 million, becoming a co-owner with News Corp. and New York-based NBC Universal and agreeing to supply shows and films.

The more I look at that the more I think they got a steal. Hulu has much more advertising potential than YouTube and they got in for pennies on the dollar for what Google paid. All of their streams have big revenue potential, versus only a small number for Google. That makes scaling economical, no big deal to pay for the bandwidth when each byte out is bring dollars in.

The content Disney agreed to supply is far more valuable than the money they put into Hulu.

For the lazy: The article states the rate is $20-40 CPM.

The article says the standard rate is $20-40, but Hulu is raking in $60.

I'm amazed by that $60 CPM on Simpsons. You need to really get the viewers to take some action to recover that cost. I guess if you get one out of a thousand to switch from Coke to Pepsi then it will have been worth it?

Media fees are discounted based on volume - if you run two campaigns, one which has a budget of $100,000 and the other $1,000,000, you will be able to get a significantly lower CPM rates on the $1,000,000 campaign as the publisher will want the volume.

Hence, this is not an apples-to-apples comparison - if both the TV buy and the Hulu buy were the same $ amount, then it would be more relevant.

It's not apples to apples for a lot more reasons than that. A 22 minute show gets about 1.5 minutes of ads on Hulu, versus perhaps 8 minutes on broadcast. It's never good to be buried in the middle of an advertising block.

Also there's got to be a Tivo/DVR discount built in there somewhere, which I've seen almost no reporting on.

Not to mention the mute / go to toilet / boil the kettle / talk to the family discount.

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