This week we saw the first sign of what the post-advertising era might look like when Hulu announced that they would start running interactive ads using technology from recent Fox acquisition TrueX. Viewers would have the option of watching a 30-second interactive ad at the beginning of a show that would allow them to then skip the two-and-a-half minutes of interruptive advertising that would otherwise follow.
The TrueX ads will initially be introduced on all Fox programming on Hulu, and advertisers like Mondelez are already on board.
So is this the future of advertising or is it just a case of Fox trying to find an audience for a company in its portfolio?
Interactive ads are likely a future of advertising — one of several formats that will replace interruptive advertising, rather than the future of advertising. The TrueX/Hulu formula of showing the ads before the program airs allows viewers to watch the show for free without interruption, while still ensuring that the content owner makes a profit. That sounds like a win-win situation for everyone involved.
As more and better data becomes available, and user targeting becomes more refined, viewers should begin to find that most of the ads they’re being served are for products and services that actually interest them. This will make the interactive format even more valuable, as it increases the likelihood that viewers will actually interact with the ads, which in turn increases both engagement and effectiveness.
A Better User Experience
User experience will be a key differentiator for television services in the coming years, and the ability to watch entire programs without interruption will be a critical feature. As the movie industry has long known, viewers are happy to put up with some advertising before the show in exchange for an uninterrupted viewing experience afterwards. This is especially true for viewers watching on a digital platform where viewing can be assumed to be more intentional — the viewer has purposely set out to watch a specific program, versus randomly channel surfing just to see what is on TV.
More Like ‘Real’ Ads
Interactive advertising should also prove to be quite popular with brand managers as the ads feel more like ‘real’ ads, with strong selling messages and calls to action. This positions them favorably in regard to their ‘new advertising’ competitors, native advertising and branded content. Many marketers feel those formats soft peddle the brand sell too much and would welcome the more traditional structure of interactive ads along with their easily trackable feedback loops.
Hulu now effectively has three ways for viewers to watch its programming, and this may prove to be a harbinger for how the industry evolves. Those with higher incomes or higher levels of involvement with the programming can choose to pay $11.99/month to avoid advertising altogether. Those who want to interact with a thirty-second ad at the beginning of a show can then avoid interruptive ads during the show, while those with a lesser degree of involvement can just sit back and watch ads (or, more likely, use the ad breaks to check their Facebook accounts.)
Take those models, throw in a smattering of native ads, product placement and branded content, and you just might be looking at the future of TV advertising.
Originally published at tdgresearch.com on November 5, 2015.