Consumers are turning on their Apple TVs and Rokus more often than a clunky traditional cable box—leaving traditional cable in the dust as they stream digital content. This trend towards digital consumption means more advertising dollars spent in programmatic media. And chasing those programmatic advertising dollars are new advertising platforms specific to every channel or platform.

The question is, should you let these new ad platforms catch those dollars?

The latest example is Hulu’s new ads manager. Placing ads on Hulu is nothing new—we all know that. However, Hulu has recently rolled out its own platform for agencies or companies to buy their own media placements, with the ruse of delivering ads in quality content across this highly-coveted channel for brand awareness.

The catch is, that most of these channel platforms (like Spotify, and now Hulu) were originally created for companies to be able to create their own ads, rather than be a solution to deliver quality inventory. 

Knowing that ads survived on these channels long before the ads managers rolled out, it could be helpful to understand the primary methods of purchasing inventory on platforms like Spotify or Hulu.

1. Direct IO – This is a contract directly with Hulu or Spotify, who will execute and manage the media buy for you. Many of the big companies that advertise on Hulu operate under this method. (Think about Tide. How many Tide commercials have you seen on Hulu? Is that just me with my messy children?) These advertisers have big budgets to pay premiums, which gets them the highest quality inventory. Since Hulu manages this themselves, there is a better likelihood of being able to purchase inventory in specific content.
2. Programmatic Guaranteed (PG) – This is pre-arranged inventory that can be accessed via a deal ID or PMP, where Hulu or Spotify for example, creates a marketplace just for that specific ad buy that can be executed via self-service DSP of your choosing. This is good quality inventory, though the best inventory is reserved for direct IOs.
3. Open Exchange – This is fully programmatic, with auction-based, bidding against all advertisers on the exchange. Most well-known DSPs have access to this type of inventory, though it is the lowest quality with less ability to direct your dollars into specific content.

You might think, “Hulu is Hulu. Any Hulu inventory is good inventory.” 

This is, in theory, true—but only if you are a brand or a product that is useful to the masses, regardless of circumstance. A big piece to any smart campaign strategy is your audience and targeting capabilities. 

Spotify and Hulu have minimal data they can use to apply targeting in comparison to demand-side platforms (DSPs). They’re stuck using whatever platform information they have, which is largely demographic at best. For example, if you’re looking for consumers who are in-market for your product, Hulu or Spotify could never find that audience for you. To do this, you’d need to execute via a DSP, where you can leverage first and third-party data. 

This means that the self-service capabilities of Hulu will never really be meant for large advertisers, who have access to much more robust relationships with DSPs and media buying teams to execute these types of buys on a more strategic level. Instead, these platforms are better for smaller brands who just want to test the waters on Hulu with very small budgets.

Now you’re asking, “If that’s the case, then why would Hulu roll this out anyway?

There is a good reason, and it’s been highlighted with recent events. Many big brands recently boycotted Facebook to take a stance on social justice. The media takeaway from this, is that although millions of dollars got pulled from the platform, Facebook’s profitability didn’t waiver. That’s because they have a sophisticated ads manager, and the large percentage of their ad revenue comes from small businesses who employ this self-serve method to run their media. 

Hulu is not there yet. But, their new ads manager is their way of tapping into those types of budgets for the long haul. By creating a really easy platform—where any brand can come in and get some buys off the ground—it can eventually grow into a high-revenue advertising model.

Should I get access to Hulu’s new ads manager?

Let’s get a definitive answer to your original question. To do this, we’ll counter you with two questions of our own.

1. Do you have sizable marketing budgets? If you do, and you really want Hulu inventory, we’d recommend a direct IO with Hulu or a broader Connected TV media buy instead.
2. Do you need strategic planning to meet your audience goals? If this is the case, then contact us for a more in-depth programmatic media plan!

Want to chat more about programmatic television? Drop us a line. We love this stuff!