Hulu as an Ad Agency?

June 8th, 2009 by Matt | Posted in Uncategorized, ratings |

D7 shaped up to be quite the event.  The lineup (as always) was fantastic, and the discussions have been thought-provoking.

The idea that most stood out to us came from Kara’s sit-down with NBC CEO Jeff Zucker.  As Peter Kafka relates, the network chief said,

“[We] need better ads online. Hulu itself could become an ad agency, and that’s something we’ve talked about.”

People got excited at the prospect of seeing more ads like the cool  “Alien” Super Bowl spots with Alec Baldwin that Crispin, Porter & Bogusky did for Hulu. We’re guessing Zucker wasn’t actually proposing to make Hulu into a creative agency. Much more likely he was talking about Hulu handling the media planning and buying functions that media agencies perform. Here’s why a move by Hulu in that direction would be a great development for the digital video industry.

As we noted previously, US video views surpassed US search queries in November of 2008, yet marketers are spending just $7 on digital video per every $100 spent on search.  Digital video is under-monetized partly because the importance and metrics of engagement aren’t very well understood by the vast majority of media planners and buyers.

Hulu’s insight into viewers’ habits and tastes makes it a natural fit for advising brands’ media spending on digital video. Plus, Hulu has consistently delivered the highest rates from brands of any of the video distribution sites ASM deals with, showing that Hulu’s sales team actually knows how to make a compelling case for video content online. Okay, it’s not quite fair, since Hulu is serving up mostly video produced for TV, but that may be what advertisers need to part with their dollars – an agency that is making the transition from TV to interactive media right alongside them.

To put a finer point on what we hope Zucker was proposing, Hulu would make for a great digital media agency. We think Hulu’s expansion into this area would create more informed brands, and grow the digital video pie for everybody.