Hulu Changes Brand Content Strategy

This week, Hulu, the digital video service co-owned by Comcast/NBCUniversal, Disney and Fox announced that it was re-shaping its approach to Branded Content.  To this point, the branded content team had been focusing on creating and developing shows in partnership with advertisers.  In the past, Hulu has sold the idea of shows to brands such as Ford and Subway, which the brands would then produce and would be distributed via the Hulu digital platform.  The company announced this week that they would be leaving this model, and would instead be focused on offering more comprehensive solutions across the Hulu platform.  The company said that this will likely take the form of more complete brand takeovers of the Hulu web portal, as well as more active efforts to sell sponsorships and product placement within original content being developed by Hulu.

This development feels like a retreat towards the more traditional advertising relationship.  For years people have been touting the need for advertisers to get more creative and to create more meaningful and compelling content.  This view however has two major flaws with it.  The first is that brands do not traditionally have the personnel or capabilities to develop serial content, where one piece of content builds upon the content that preceded it.  It is not within most major consumer brands' core competency to undertake such an ambitious development effort.  As a result, this transition by Hulu seems like a more natural re-alignment to mirror the capabilities in the marketplace.  The second key issue, is that consumers are very wary of being sold to.  The face forward place that Hulu was placing its brands in can often be off-putting to consumers.  This likely led to the content not performing to the levels that Hulu and its brand partners had expected, and not providing the ROI they had anticipated.  As a result, Hulu is adjusting its strategy to reflect this marketplace reality, and to fit its branded content efforts more within the scope of what consumers find acceptable.

So what you find here is that there is a self-fulfilling circle when it comes to branded content.  The brands themselves do not have the capabilities to develop top quality content, and as a result, the content feels even more like an effort to sell product.  This reinforces in the mind of the consumer that brands are just there trying to sell them products, and therefore they tune out the branded content.  I believe that at the end of the day, consumers want to watch great content, and they don't really care who produced it, so long as the content is interesting and compelling.  The struggle for brands and platforms like Hulu going forward will be to find ways to create that compelling content in a way that feels authentic to consumers and simultaneously drives sufficient ROI for brands.