Dive Brief:

• Kellogg, Maker's Mark and Georgia-Pacific are the launch partners for Hulu's new ad experience designed to help advertisers connect with and reward binge watchers, Hulu announced in a blog post.
• Machine learning will identify when a binge-watching session begins and will serve up contextually relevant ads during a viewer's third episode, where they'll see a message promoting the next episode through offering it ad-free.
• Kellogg is running ads for its Cheez-It Snap'd snack, an item the company hopes to position as the perfect snack during binge watching due to its "lighter texture, amped up cheese flavor and lower-volume crunch." Georgia-Pacific will run a campaign for the paper towel brand Sparkle, promoting larger rolls of towels with the message of "more of what you want," a hint to the binge-watching viewing experience, per the announcement. Publicis Media is the exclusive agency partner of the launch.

Dive Insight:

Brands are looking to get in front of cord-cutting consumers who binge watch their favorite TV shows on streaming networks, but a core challenge is to create a good user experience among viewers who are often used to ad-free viewing on Netflix, Apple TV and Amazon Prime.

With this in mind, Hulu is working to improve its user experience and integrate ads in a less intrusive way. The company has been introducing new advertising formats over the past year, recognizing that consumers watch streaming content differently than traditional TV. The formats aim to support the user experience by restraining the ad frequency so viewers are not bombarded with the same message repeatedly.

Recent examples include a new interactive advertising unit from Hulu that links email and video marketing, allowing viewers to request offers from the advertiser. In addition, the company has tested performance-based measurements that help brands see how many consumers purchased a product, downloaded an app or signed up for additional information after seeing their ad on the streaming platform. Earlier this year, Hulu piloted "pause ads," a short-form translucent ad format that plays when a user hits pause on their show. Coca-Cola and Procter & Gamble's Charmin brand were among brands first testing this format.

At the IAB's Digital Content NewFronts in May, Hulu's head of ad sales Peter Naylor addressed these new ad formats, saying the company is focused on "creating new ad solutions that are relevant and seamlessly integrated into the viewer experience."

Hulu counts more than 28 million U.S. customers across its various subscription tiers. The company said 75% of U.S. consumers indulge in binge watching their favorite shows, and 50% of these ad-supported viewing hours on Hulu are binge watched — or viewed at least three episodes at a time. With the new format that rewards binge watching, Hulu is supporting this consumer behavior and encouraging them to stay on the platform.