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Hulu Brings Next-Gen Ad Platform to TV

Mari Silbey
8/26/2015

Hoping to usher television into a new, more-profitable age, Hulu has launched a private programmatic ad exchange. The platform enables automated ad buying through a computerized bidding process, and in many ways mimics today's algorithmically driven financial exchanges.

Hulu LLC -- which is jointly owned by 21st Century Fox , Walt Disney Co. (NYSE: DIS) and NBC Universal -- has partnered with Oracle Corp. (Nasdaq: ORCL) and LiveRail Inc. , which is owned by Facebook , for the new ad venture. According to a report by Variety, not everyone will be able to access the exchange. But for those advertisers that sign deals with Hulu, the exchange will pair ad inventory data with data on desired audience characteristics. Companies will be able to tap audience data hosted in Oracle's data management platform, but will also be able to bring their own viewer-targeting data to the table.

LiveRail will power the actual exchange, making the ad purchasing experience with Hulu similar to programmatic ad buying systems already enabled across major web properties.

The latest news from Hulu is part of an accelerating trend to implement new TV ad technologies as old advertising models fail and traditional TV ratings plummet. Not only are audiences fracturing across different viewing platforms, but television, to date, hasn't been able to offer the targeting capabilities that the web can deliver.


Want to know more about the impact of web services on the pay-TV sector? Check out our dedicated OTT services content channel here on Light Reading.


In one effort to become more data driven, the pay-TV industry is working on expanding dynamic ad insertion (DAI) platforms that swap out ads based on when and where content is viewed. The cable-backed company Canoe Ventures LLC says that it has DAI technology for video-on-demand systems enabled across a footprint of more than 35 million households in 48 of the top 50 media markets. Those households include subscribers from Bright House Networks , Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. and Time Warner Cable Inc. (NYSE: TWC).

Meanwhile, ad tech company BlackArrow Inc. , which is also known for VoD ad insertion, is now looking to expand its efforts to live, linear TV. Acquired by Cross MediaWorks earlier this week, BlackArrow says it will be able to combine assets from its new parent company with its own platform to create a one-stop shop for advertisers looking to target audiences across all television platforms. (See Cross MediaWorks Acquires BlackArrow .)

Beyond DAI technology, pay-TV providers are also working to better leverage their own set-top data for viewer targeting. Cablevision Systems Corp. (NYSE: CVC), for example, announced earlier this year that it's selling audience analytics and set-top usage data to powerhouse network ESPN for advertising purposes. (See Cablevision Deals in Set-Top Data With ESPN, Disney.)

As for Hulu, the company says it offers additional advantages over traditional TV advertising, including "a lighter commercial load" and "higher brand recall." Hulu is also expanding its reach through new distribution deals, including a just-announced reseller agreement with Cablevision. (See Cablevision Embraces OTT With Hulu.)

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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danielcawrey
danielcawrey
8/28/2015 | 12:10:27 AM
Re: Loooong time coming
People have lost interest in regular television advertising. Often when ads come up on TV, people just start looking at their other devices these days. 

Hulu is really smart in trying some inventive ways to fix this problem. With data, they will be able to optimize ads a lot better. 
DaveZNF
DaveZNF
8/27/2015 | 6:56:44 PM
Lighter... due to poor sales?
While Hulu may run a lighter load of ads than broadcast TV, I wonder if that's by design or due to an inability to sell spots? The last few times I subscribed to Hulu, I saw the same ads over and over and over again. And some might say Hulu's biggest hurdle with customers is those ads. Unless the advertising becomes so successful that they're able to drop the monthly fee? 
msilbey
msilbey
8/27/2015 | 11:01:20 AM
Loooong time coming
Advanced advertising has been a long time coming, and I fear there are still major logistical hurdles to overcome. But the industry has to make progress or revenues will ultimately collapse.
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