Hulu's reversal on political issue ads opens a new can of worms

Hulu will now accept ads related to sensitive political issues, after Democrats criticized the Disney-owned platform for rejecting advertising related to abortion access and guns. The decision, first reported by Axios on Wednesday, overturns a policy at Hulu that prohibited ads about controversial content — a policy that has itself become more controversial in light of the Supreme Court's decision undoing Roe v. Wade.

"After a thorough review of ad policies across its linear networks and streaming platforms over the last few months, Disney is now aligning Hulu’s political advertising policies to be consistent with the Company’s general entertainment and sports cable networks and ESPN+,” Disney told Axios. “Hulu will now accept candidate and issue advertisements covering a wide spectrum of policy positions, but reserves the right to request edits or alternative creative, in alignment with industry standards."

Democrats, who had accused the company of "censorship," applauded the decision. "It’s really heartening to see Hulu reverse course on this damaging policy before the midterms," said Stephanie Grasmick, CEO of Rising Tide Interactive, a digital strategy group that works with the Democratic Congressional Campaign Committee. "More than ever, digital channels are a primary source of information for voters, so it’s critical that campaigns are free to message on some of the most important issues facing our country, including abortion access and gun violence prevention."

And yet, Hulu's decision to open the floodgates to issue ads raises thorny questions for the platform, including whether it will offer the public any way to see how much political groups and campaigns are actually spending on those ads, whom they're targeting and what they're saying.

Streaming platforms like Hulu are already held to a different standard than traditional broadcasters when it comes to political ads and don't face the same transparency and disclaimer requirements that, say, ABC, NBC and CBS do. That's been a huge source of anxiety for political spending reformers, who have called on the Federal Election Commission to update its transparency requirements for streamers at a time when campaigns are increasingly spending on connected TV ads. In the 2020 race, election-related advertisers spent more than $100 million on connected TV ads.

While it's blocked ads about controversial issues more broadly, Hulu has allowed explicitly political ads in the past and has repeatedly faced criticism for how little accountability there is for the advertisers behind the ads. Now that it's allowing issue ads to run, too, Hulu runs the risk of allowing even more ads to flood the platform, with very little insight into advertisers' targets and spending.

Hulu did not respond to Protocol's questions about whether it has any new transparency features planned and directed Protocol to its public statement.

Hulu also isn't the only company to reverse course on its ad policies ahead of the midterms. Earlier this year, Protocol reported that Spotify would also return to political advertising in 2022, just two years after it decided to prohibit political ads altogether. Spotify said it would only allow ads from candidates, political parties, PACs and elected officials, but it also hadn't created any public-facing tracking system for those ads.

Streaming platforms are now years behind other digital ad giants, including Meta and Google, in terms of providing more transparency into political ads. In the wake of the Russian Internet Research Agency scandal in 2016, both of those companies built political ad archives that offer the public information about who is running an ad, how much they're spending, what they're saying and who they're reaching. Meta even includes issue ads in that archive. Those archives have proved critical for research into elections ads, but they've also created PR crises for the companies — crises that streaming platforms have been able to mostly dodge.

There is, of course, value in Hulu allowing ads that discuss some of the most pressing issues of the moment, including abortion. That's especially true at a time when lawmakers in anti-abortion states are seeking to censor speech about abortion and when getting the word out about abortion access is becoming increasingly tricky online. It's little surprise that Democrats especially would want a change in Hulu's policies.

But allowing ads about abortion necessarily means allowing anti-abortion ads, which may very well contain messaging that abortion rights advocates would consider misinformation. Without any sort of transparency system in place, those ads will now be a lot harder to find.

Update: This story has been updated to include Hulu's response to Protocol.