MEDIA

Hulu's Successful Ad Strategy: "Less Is More"

11/29/2008 05:12 am ET | Updated May 25, 2011

THUMBS up and thumbs down ratings for commercials. Choose-your-own-advertisement options before shows begin. Interactive games during advertising breaks.

In the last year these online advertising innovations have been popularized by Hulu, the online video Web site that will celebrate its first anniversary on Wednesday. For all that has been written about Hulu's easy-to-use, aesthetically pleasing interface, the advertising experience is equally important.

In the place of the long commercial pods that TV viewers have become accustomed to, only one ad is shown during each segment break on Hulu. Fewer ads make the ones on the site more memorable, Hulu executives say, allowing the site to charge higher prices for the ad units.

The notion that less is more is absolutely playing out on Hulu, Jason Kilar, the chief executive of the site, said. This is benefiting advertisers as much as it is benefiting users.

While Hulu was not the first site to serve up full-length television shows or create new advertising units, it now dominates the emerging market for ad-supported TV and movie streaming. It emerged in public beta form one year ago with 10 advertisers, made its official debut in March, and now counts more than 100 sponsors, from General Motors to Old Spice.

The site has grown steadily, providing 142 million streams to 6.3 million unique viewers in September, Nielsen Online reported last week. Hulu is now the sixth-most-popular online video brand in the United States, surpassing the online video networks operated by ESPN, CNN, MTV and Disney. (It ranks far below YouTube, which streams 20 times as many videos as any other brand in the United States, and behind sites owned by Yahoo, Fox, MSN and Nickelodeon.)

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