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July 26, 2017

Strata’s Partnership with Hulu Offers Advertising Integration of OTT and Linear TV

Strata, a unit of Comcast Platform Services that manages a media buying/selling platform, formed a partnership with Hulu that has opened the premium over-the-top (OTT) video hub’s ad inventory to Strata’s agencies that are looking to place local and national spots across multiple platforms.

Netflix App on a Apple Tv

Strata, a unit of Comcast Platform Services that manages a media buying/selling platform, formed a partnership with Hulu that has opened the premium over-the-top (OTT) video hub’s ad inventory to Strata’s agencies that are looking to place local and national spots across multiple platforms.

Hulu offers impressions & ratings in all 210 DMA’s, however, Hulu’s top markets for streaming closely resembles the top 10 broadcast DMA’s. Further, impressions/TRPs purchased through Hulu can be targeted to any standard Nielsen buying demo. Behavioral targeting can be layered on as well, increasing the accuracy of reaching a brand’s desired audience. The subscription service targets on IP address rather than subscriber, which means all advertisements are viewed by local viewers regardless of where the main subscriber resides.

The timely integration is a reaction to Streaming Video On-Demand’s (SVOD) penetration in U.S households.

Digital Video Recording (DVR) was considered the #1 “network” in America, but a recent Nielsen report shows that DVR penetration has plateaued since Q2 2016 and Streaming Video On-Demand’s (SVOD) steady increase actually has their penetration outperforming DVR at 54% of U.S. households.

Hulu Offering

As streaming video content surges, U.S. connected TV household penetration increases 14-16% year-over-year and is projected to be up to a little under 100 million households by 2018. That’s nearly 80% of all TV households!

Much of this is due to how content is being consumed, especially millennials. According to Nielsen, 50% of millennials watch linear TV exclusively after air – up from 15% in 2007. However, the viewing behavior noticed in traditional TV is not just happening for millennials. Though they are leaning into VOD more aggressively, Adults 25-54 are changing their viewing habits as well. As audiences are leaning into VOD, SVOD & DVR, brands have to find more ways to reach their desired audience.

Hulu’s penetration in most DMAs averages about 15%. SVOD penetration across the US highlights the fact that SVOD is not a temporary trend and is quite prevalent in local markets around the country. Some markets are experiencing significant YOY growth in Hulu subscribers, with Philadelphia taking the lead at 10% YOY growth.

In addition, Hulu viewers are predominantly watching on their Connected TVs and other OTT devices to enjoy this content. Total streams are up 44%, but there is a continued shift by platform. In fact, living room viewership is up 54%, followed by mobile up by 50%, and desktop 10%.

The integration of Hulu into Strata’s local buying platform has made it a complement to traditional local television buys, especially in high-wire markets where it is sometimes difficult to meet rating goals, such as San Francisco and Seattle, where Hulu does extremely well in. It also provides incremental reach to a traditional television buy.

A custom study with Nielsen conducted earlier this year to measure the incremental reach that Hulu can drive for brands when advertising on both traditional TV and Hulu. For this particular top TV spender, the campaign ran for the same flight on both platforms. The brand spent roughly $50MM on TV and only $1MM on Hulu. With this, the TV campaign reached about 170MM viewers on TV and 6MM on Hulu. While TV had a larger spend and reached more unique viewers, nearly half of Hulu’s reach was incremental. Hulu viewers tend to be light TV viewers, whereas traditional TV viewers tend to be medium to heavy viewers. This means that Hulu allowed the brand to target viewers on Hulu that they would not have otherwise reached on TV.

In conclusion, as the ever-changing media landscape continues to adjust to the consumer’s demands,

Hulu’s partnership with STRATA allows local media buyers to go beyond conventional TV buying options to meet clients’ TV advertising objectives.