Comment by surrealize | Hacker News Reader

Comment by surrealize | Hacker News Reader

It's a little disappointing that we're even having this conversation at all. Online content should be so much more valuable than broadcast content, both to consumers and advertisers. And yet, online is still the red-headed stepchild.

Online content can target ads individually! I've filled out the survey on Hulu, they know that I'm a guy, my age, etc. They probably have pretty good guesses about my income and my interests. The full set of shows that I watch paints a pretty detailed picture of who I am and what I like. In an ideal world, they could use that information to show me very precisely targeted ads.

That famous quote, "Half the money I spend on advertising is wasted; the trouble is I don't know which half." is probably mostly right, except I'd bet that it's a lot more than half that gets wasted. And Hulu should have the ability to fix that, by individually targeting ads! But they're still showing me, a fairly nerdy guy, lots of Febreze ads and Glade sense & spray ads and even the occasional tampon ad or whatever.

Google is proof that precisely targeted ads are really, really valuable. And I think targeting ads well even makes them less annoying; if you're showing me something that's actually relevant to me, I feel less like my time is being wasted. But Hulu and its advertisers still haven't figured out how to match up ads and users.

It's sad. But whoever actually solves this problem will make oodles of money.

The major difference is ad load. Watch a 1-hour show on Hulu, and you'll see that the content is typically ~42 minutes long. Which means that on-air, it's 18 minutes of ads that fill the balance. But online is showing way less ads than 18 minutes. Even with 4-5 ad breaks, you're watching, at most 2 30-second ads per break. In online streaming, revenue per ad (CPM) is competitive with TV, but revenue per viewer is much lower.

Also, targeted advertising isn't a panacea. I agree it can be better, but if you're a big brand spender like McDonald's, Nike or Target, you're targeting just about everyone. Gender, age, income, and interests matter a whole lot less.

Not that it makes up the whole difference, but Hulu shows about twice as many ads as you're saying. The typical hour-long show has 4-6 ad slots (including beginning and end), and they average 60-120 seconds (with a rare ad group over 2 minutes), not 30-60.

http://i.imgur.com/ZnB3Q.png

There are fewer ads on shorter shows, and even fewer on clips, but it's still not what it as sparse as when Hulu first came out.

You're right -- thanks. They've been slowly increasing their ad load every year since they've launched, and it looks like they're doing three ads in a break now for some shows.

Maybe TV advertising is a speculative bubble for big brands just as interested in "branding" than measuring any kind of conversion funnel, the second they get onto something like Hulu they can much more easily see a campaign failing.

The other aspect could be that online TV show streaming is still new technology and the early adopters are the same kind of people that don't respond well to traditional TV advertising.

Online content should be so much more valuable than broadcast content, both to consumers and advertisers

This assertion is not correct. Yet. The reality is that as an advertsing medium, the internet is far inferior. There are reasons for this. For lead gen and seach, online is good. Unless you can make the case otherwise, though, this does not hold in other areas. You can't just assert that they are similar.

Source: Its been refuted by the market. To date.

That's why I said "should be". Individual targeting should be really powerful--just look at google. But Hulu so far hasn't been able to do a good job of individual targeting.

I'm sure there are reasons why; it'd be interesting to hear what they are rather than just "there are reasons".

Its not really clear though, based on what you are writing, if you are saying the should be the same or they should be worth the same.

TV is very powerful for ads that require or leverage immersive, experiential pre-visualization. These are expensive to produce, so not fit for micro-targeting. they are also large data-payloads, so not fit for distrubution in N-bundles.[1]

At some stage, in the Steve Jobs world (no pun intended), the mediums will converge, technologically. And then things will change, a bit. But the above forces are somewhat fundamental, and just need to be considered (at least).

Its generally not the TV people, they are more caught up on exclusivity around content. Its the advertisers, who sense the ability to communicate online is (has not been) up to the standards they need for the black arts in which they are well versed.

Other people can probably add more to this, but this is at least a roadmap for analysis.

______

[1] Questions also remain outstanding on the environment of online: is it too distracting/evasive, will it just be skipped, etc. But this is a grey area, moreso than the others. For example, humour or design applied to add interest might be a strategy (if it were economical to run online-spefic ads, which is generally is not yet for TV-replays). The other evidence (as noted in another comment) is the reduced payload. Hulu would be putting more on if they could, but we can infer they don't think its a good idea. Most likely, the internet consumer is not willing to tolerate the additional adds before leaving or being so distracted, the existing ones lose their value. Etc.

Hulu does target users already based on a lot of demographic information they have. This can be based on info found in your user profile (gender, age, zip code, etc). Additionally Hulu builds profiles based on past viewing history and is able to fit a viewer to a demographic with remarkable accuracy.

Ads on Hulu are and have been more effective for advertisers than its television counterpart (http://socialtimes.com/hulu-ads-are-twice-as-effective-as-te...). The issue for Hulu is that because there are less of them in every stream there is less to go around. This especially bothers the content providers.

Except ad revenue on the internet is nothing compared to ad revenu on tv , unless you are google and you sell personal data along with ad spots.

How does Google sell data? You mean the demographic breakdown of exposures?

Hulu pulls in $30 - $40 CPMs. That is comparable with TV, no?

Only on reduced loads per unit of content time. At least to date. It's a nuance, but it's non-trivial.

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