Let's face it, Hulu's current ad recommendation engine sucks. No matter what you tell it, it still shows you the same ads, and then just doesn't give you the option of telling it to not show you those particular ads anymore. At least, that's what it's been in my experience anyway. Now, they are offering you another way to see ads that are more relevant by swapping the one you're watching for one that might be more relevant.
Hulu Ad Swap
Hulu Ad Swap gives you "ultimate control" over your Hulu advertisements and in the same breath will give advertisers are more engaged audience.
However, I'm reminded of the lesser of two evils cliche. Would I rather watch an irrelevant ad about auto insurance or would I rather watch an irrelevant ad about feminine hygiene products (because Hulu seems to think I need both when I am neither female nor own a car). Personally, I would rather watch 30 seconds of nothing. In fact, because Hulu's ad platform is so poor at choosing appropriate ads for me, I've taken to reading a book when the ads play and just totally blocking them out. Not very effective are they?
Well this new Ad Swap promises to increase viewer engagement because they get to choose which ad plays by swapping it for the one currently playing. We know that giving viewers choice over their ads is a good thing, there's a lot of studies that back up that claim, and it's just a logical conclusion. Here's a look at what they are offering:
See! Auto insurance! Oddly, I've told them numerous times that I would be happy to watch HTC ads, and they still don't serve me HTC ads. Hopefully, this more direct and immediate way of doing things will work better. However, I'm curious how long it will be until this is available on all platforms. Even today you can't use the ad tailor on the Xbox 360 so you get stuck watching, yep, auto insurance ads. Are they trying to tell me I need a car? Will they offset the ballooning of my carbon footprint somehow if I do get one? No? Then forget it, I'm sticking to my feet and public transport.
Ad Swap Benefits to Advertisers
Aside from the claim that it will create more engaged viewers (which I question), there are some more tangible and quantitative features. For example, that first ad that ran and was then eighty-six'd for a new ad, won't cost the advertiser anything. I love how Hulu tries to make this a great win for the viewers (who are paying a subscription and still getting ads FYI):
The advertiser whose ad initially began to play is not charged for that impression. This is a win-win scenario for both the user, and for the advertiser. The user now has ultimate control over their ad experience and the advertiser does not have to pay for an impression that would have been wasted.
I agree it's great for advertisers, and if it were otherwise, it would seem deceptive. However, you have to remember that Hulu probably states a video ad impression is some x amount of time or percentage of ad played.
Users are anonymously quoted as saying the new Ad Swap is "fun" and that they were "kinda looking forward to it," which really seems laughable to me. Who would look forward to ads just so that you could switch which ad you saw? Since I pay for Hulu Plus, I would really look forward to no ads personally.
Hulu Ad Swap By the Numbers
Since they've been testing for some months (why wasn't I invited?) they decided to pull some research on the effectiveness of it all, remember, this is research from Hulu, on a Hulu product, conducted by Penn Shoen Berland who interviewed 1500 online video viewers ages 14 to 54. 500 were in the control group, not seeing Hulu Ad Swap, and 1,000 interacted with it. I won't even get into the margin of error on this.
Here's what they found. 73% were more likely to pay attention to the commercial if they can select which one is shown and 69% that ad choice would improve the viewing experience. I wonder how many simply said, "I totally ignore the ads and run to the bathroom/kitchen/make out with my partner/stare blankly at a wall," etc. I also wonder what percentage of those viewers would be more likely to watch the ads given a choice of what ad to see.
In regards to effectiveness uplift, there was a 93% unaided recall increase, 27% improvement in brand favorability (because of the subconscious thing where you weren't forced to watch it, you chose to watch it probably), 35% increase in purchase intent (for auto insurance?) and 46% in stated relevancy.
Hold the phone a second. Less than half said the ads were more relevant? See what I mean about Hulu's ads? They just can't seem to find the proper fit with the viewers me thinks.
I Don't Hate Hulu
On the contrary, I love Hulu. I hate the fact that I pay them, and they show me ads. Then again, I pay Time Warner, and I see ads, so I shouldn't be surprised and should probably just take it. Plus, I work in online video advertising (well, I write about it anyway) so I know how and why it's there. But that doesn't mean I want it there, in my face, when I'm trying to catch up on Fringe, Castle and Whites.
Hulu Ad Swap is a good idea. I truly believe that. However, I also think that perhaps their advertising pool is just too small and so no matter what they do, until they drastically expand the advertiser pool, they will continue to suffer from the low relevancy problem. Or at least stop showing me auto insurance ads along with feminine hygiene ads.
The real winner in all of this, is Hulu and the content providers. As stated in their research, this will facilitate higher ad rates meaning more money for the content providers...and Hulu, but conversely, that's a negative thing for the advertisers because they're paying more and still seeing a low relevancy. Maybe Geico should hang it up on Hulu and go sponsor more complementary content elsewhere, because really, I don't see how it fits into my Whites watching, which is about English chefs, oh wait, there was that one episode that sort of had cars in it.
If you're deeply interested in how they're pulling it off without drastically reducing ad effiecency, read the tech blog entry on Hulu Ad Swap, which is far too long for me to address here.