Regular users of premium video streaming site Hulu are by now familiar with the drill: After clicking the play button on a television show or movie, you’re given a choice of two or three advertisements to watch. You make your selection and begin watching the latest episode of “Modern Family,” which is briefly interrupted only with the ad of your choice.
For something that may seem like a relatively minor detail in the course of one’s day, this Ad Swap (formerly Ad Selector) functionality is Hulu’s bold, experimental bet on the future of television advertising. The idea is simple: by giving viewers some say in what ads are displayed, you can show them more relevant messages. For advertisers, the value in more effectively targeting ads toward the people most likely be interested in the company’s product. Everybody wins.
The approach appears to be working, according to a study commisioned by Hulu. Viewers were able to recall brand messages without a cue or prompt (“unadided recall” in the parlance of focus groups) about 93% more effectively when ads were viewer-selected. Aided recall of those brands reached “near universal” levels, jumping up to 91% for viewer-selected ads, compared to 59% for ads displayed at random.
In fact, every major metric measured saw a substantial increase. Brand favorability, purchase intent and stated relevancy, all measurements highly sought after by advertisers, improved significantly when ads were selected by viewers rather than played randomly.
Granted, it’s not all viewers who are participating in the Ad Swap program. Hulu said they only expect about 3% of users to opt in to the initiative. Still, the study demonstrates the effectiveness of a generally more innovative and user-centric way of displaying advertising in a digital age, something from which media companies old and new can likely draw a few lessons.