Dive Brief:
- Coca-Cola and Procter & Gamble's Charmin brand will pilot a new Hulu advertising format called "pause ads" that the streaming service plans to debut in Q2 this year, Variety reported. The ads, which activate five seconds after users hit the pause button, are static, contain short messages and small images, and appear on a translucent background so that the viewing content remains visible.
- Hulu will test for consumer reactions to the ad experiment for 90 to 120 days after the rollout. The company has already spent months ironing out pause ads' kinks, including gauging how long after the viewer hits pause to serve the ad, per Variety.
- Jeremy Helfland, Hulu's head of advertising platforms, told Variety that pause ads could potentially become richer, more interactive and even include transactional elements in the future if tests prove successful. Variety first broke the news that Hulu and also rival AT&T would experiment with ads that only run when the viewer decides to hit pause in December.
Dive Insight:
Hulu's pause ads have been an expected arrival to the streaming space, but Coke and P&G helping to pilot the format signals that some the heaviest hitting marketers are looking for ways to innovate with their strategies as streaming becomes a more dominant way of consuming content. The nascent format, though relatively modest given that the ads are static, could still prove appealing for brands since it comes as a recognition of the type of ad fatigue that the industry is struggling to combat on cable, which has seen plunging subscriber figures as audiences increasingly favor what are often ad-free experiences on Netflix, Amazon and Hulu. It could also be a way to draw in more younger consumers in the Gen Z and millennial brackets, who are helping to lead the cord-cutting trend and are averse to traditional advertisements.
For viewers, pause ads have the potential to be engaging since they might grant a sense of control over when ads are served compared to traditional commercial breaks. Stemming from that, pause ads could provide more relevant, occasion-based messaging. Janette Yauch, Charmin's brand director, told Variety that pause ads are an exciting opportunity because people are often taking a break from programming to go to the bathroom. That example also highlights roadblocks pause ads could theoretically run into, since the format is triggered when viewers are likely planning to do an activity other than looking at their screen. Since the ad only activates after a five-second window, some consumers might miss or ignore the message if they walk away for a break and immediately hit play upon returning.
If pause ads do resonate, however, they could be a powerful way for Hulu to build out its advertising products, including by potentially linking them to a point of sale, and differentiate its business in a more crowded field. Hulu is already competing fiercely for eyeballs against Netflix and Amazon, but will soon feel additional pressure as NBCUniversal, iPhone maker Apple, AT&T's WarnerMedia unit and soon-to-be parent company Disney all launch streaming services of their own.
Some of those rivals also appear to be looking to develop more experimental ad products as a way to stand out. Netflix is toying with interactive content, including through a recent choose-your-own adventure movie called "Black Mirror: Bandersnatch." One of the first viewer choices during the program pits two real-life cereal brands against each other, which has raised industry speculations that Netflix could try and integrate more interactive and data-driven marketing capabilites into its service in the future.
