Hulu Brings in the Dough: $240M of Revenue in 2010

Hulu is going to make more than $240 million in revenue in 2010, the company’s CEO Jason Kilar revealed at GigaOM’s NewTeeVee Live conference today. Kilar added that Hulu generated $108 million in revenue in 2009. Hulu had 30 million users in October 2010, who watched some 260 million content streams as well as 800 million ad streams during that month. Kilar said that Hulu now has 235 content partners. The company had 352 advertising clients in Q3.

“The leading source of revenue is through advertising,” said Kilar, adding that more than 40 percent of money generated with content in this industry is generated through advertising. This has led Hulu to optimize its ad experience, and Kilar showed a few new features that the company will roll out in the future.

Hulu will introduce personalized advertising, addressing users by name. Kilar said that this type of personalized advertising is getting a 10 percent response rate. The company is also comparing users’ viewing history to develop more exact profiles. For example, it can with a 99 percent certainty tell whether a viewer is male or female just by looking at his video viewing history.

Another feature the company will roll out is the ability to swap out commercials, so that users who don’t want to watch a car commercial can switch to a commercial for dog food instead, for instance. Kilar said that the advertisier of the ad that gets swapped out doesn’t get charged a cent. Kilar said that ads on Hulu are 55 percent more effective than ads displayed on traditional channels.

Kilar didn’t want to comment on plans for an IPO when quizzed by Om Malik during the fireside chat following his keynote speech. Asked why Hulu Plus is showing its users commercials, he reiterated that advertising will always be a core component on Hulu. Om questioned whether more accountability in advertising will lead to a much smaller cake for everyone. Kilar responded that accountability is essential to move ad dollars online. “That’s the way the world should be,” he said.

So what’s Kilar’s take on cord cutting? “To call it today, it’s premature,” he said, adding that this doesn’t mean cord cutting won’t happen in the future. However, he doesn’t believe that Hulu is an enabler of cord cutting, simply because sports and other forms of content are missing. That’s not an accident, Kilar explained: “Hulu, Hulu Plus and Netflix have all been consciously designed… not to be a substitute for pay TV services in the living room.”

Advertisers are "failing to harness internet"

Many advertisers are recognise the power of the internet as a marketing tool but fail to harness its power effectively, according to a study into online advertising by Group M reports Media & Marketing Europe.

The study, called Interaction, includes consumer and advertiser internet data from 28 countries, and argues that when it comes to online advertising, it is just as important for marketers to consider the benefits as well as the costs.

According to the research, internet advertising typically grows at six times the rate of traditional media. In western Europe the internet is the principal source of measured-media growth, and in North America it runs a close second to TV. Were it not for the explosive growth of the USA’s Hispanic TV, it would be first.

The study highlights four key areas that marketers need to utilize with internet advertising: reach, engagement, reputation and transaction. As traditional media declines, brands must use the internet to add reach to their campaigns. As consumers want to interact with brands, so internet campaigns should maintain brand consistency, but with "sufficient personalization to help the consumer engage with the brand or message on his or her terms". Furthermore, brands should monitor their reputation via the internet in a time when consumers make quick judgements. Finally brands must ensure that consumers can transact online.

Time Warner: Cable Ads Can Compete with Web Ads

The cable industry can compete successfully with online companies like Google for advertising dollars by launching on-demand networks supported by interactive advertising, says Time Warner president Jeff Bewkes. "Why would [this] not be the next great future of advertising?"

Read the complete article on Reuters