Are we about to see a significant migration of advertising dollars to OTT platforms?
Hulu ad sales chief Peter Naylor told AdWeek that he’s recently seen a “massive surge” from advertisers for research requests.
“In the sales business, we call that a signal to buy,” Naylor told the venerable ad trade in a Q&A. “They’re asking because they intend to move the money, and they need supporting research that shows it’s a good idea. They just need some hand-holding and some proof.”
According to global ad conglomerate Magna, OTT advertising generated around $2 billion in revenue in 2018—a tiny portion of a U.S. advertising market that took in about $207 billion last year.
Related: 23% of Subscribers Would Drop if Netflix Had Ads
Naylor believes change will come to that paradigm based on new OTT ad formats. In his wide-ranging AdWeek discussion, he cited a Hulu beta in which pauses in on-demand programming include ads.
“For the pause ads, we have two beta advertisers from some of the worlds’ biggest advertisers: Coca-Cola and P&G. For Coca-Cola, it’s the master brand Coke itself,” he said. “When you hit pause, imagine copy that says, ‘For a pause that refreshes.’ It’s contextually relevant. Then there’s Charmin, which is the brand from P&G, and when you hit pause it says, ‘Enjoy the go’ with the Charmin bear. It’s contextually cute and interesting.”
Overall, Naylor said that the quality of OTT content, improvements in bandwidth and improved delivery hardware, will drive OTT ad growth.
“The other thing that makes me so optimistic about the future of OTT is just that the most prestigious television content is happening in this space, as evidenced by the caliber or people who are creating content here,” he said. “The content is awesome. And the promise of acceleration is huge with the bandwidth explosion everyone anticipates with 5G. Plus, the hardware itself, when you see all these TV manufacturers getting more innovative, better and smarter. Those three things—content, bandwidth and hardware—means that the future of OTT is just going to be big.”
