Hulu is in bed with the Trump campaign. It's also in love with Joe Biden. That's according to numerous Hulu subscribers from all sides of the political spectrum who have taken to Twitter in recent weeks to complain about being bombarded with an onslaught of political advertising on the streaming service.
Both presidential campaigns opened up the floodgates for TV advertising in July, and an increasing number of those ads are starting to show up on ad-supported streaming services like Hulu, Peacock, Tubi and the Roku Channel. Internet TV is promising campaigns better targeting, more bang for their buck, and access to millions of viewers who have cut the cord from traditional TV. But as the cacophony of displeased Hulu subscribers on Twitter shows, the campaigns' embrace of streaming also highlights some of the challenges of the medium.
Streaming is democratizing television
Thanks to cord cutting, millions of Americans can't be reached via cable advertising anymore. Last year alone, close to 6 million U.S. households canceled their pay TV subscriptions. Early numbers suggest that 2020, and the growing economic pressure of the pandemic, will lead to even more cord cutting.
At the same time, shelter-in-place rules have led to record engagement with streaming services. And it's not just consumers who are shifting gears: Ad dollars are moving to streaming TV as well, with insiders describing an industry-wide shift in mindset. "Everyone is using connected TV advertising now," said MadHive CEO Adam Helfgott. MadHive is an ad tech startup that works with broadcasters like Tegna on their online endeavors. In 2019, many ad buyers were still primarily focused on broadcast TV, Helfgott said. In just a few months, momentum has shifted to online TV. "The appetite is really there now," he said.
That's also true for political campaigns, according to Roku SVP Scott Rosenberg. "Political advertising is definitely a growth category for us," he told Protocol. "We are seeing a ramp-up," agreed Frank Sinton, CEO of ad tech startup Beachfront. Political campaigns aren't just experimenting with ads for streaming services anymore, but making them a key part of their TV ad buys. "It's being seen as a television platform," Sinton said.
One reason campaigns love internet TV ads is a lower barrier of entry. "We are seeing spend all the way down to local races," Sinton said. It's much easier even for smaller campaigns with limited budgets to buy internet TV ad campaigns down to the ZIP code. "You couldn't do that four years ago," he said. "It's democratizing television."
Targeting is challenging, but it's still better than traditional TV
Still, targeting the right viewers can be a challenge, as those complaints of Hulu viewers on Twitter show. "Why am I getting Trump ads on Hulu?" one of the service's subscribers asked. "Shouldn't some algorithm protect me?"
One of the problems ad tech startups struggle with is the quality of third-party targeting data. "It's a bit of a Wild West," Helfgott said. Voter registration files that are outdated, stated preferences that changed over the past couple of weeks: All the same data points that result in campaigns inundating potential voters with mailers and phone calls are also being used to target internet TV audiences.
Sometimes, that data is simply wrong. Sometimes, the wrong viewers are being targeted because of changing IP addresses. "There is a lot of misinformation," Helfgott said.
But, Sinton countered: "It's still as good if not better than on traditional TV."
A bunch of Rokus used for ad fraud
Earlier this year, ad tech startup Pixalate identified an alleged ad fraud scam involving more than a dozen obscure Roku apps. The apps, which offered little more than screensaver functionality, played ads for major brands like Geico, Lexus and Uber Eats, as well as ads for local political campaigns and ballot measures. In its analysis, the company concluded that the alleged ad fraud featured "characteristics consistent with device farms." In other words: Somewhere, someone likely set up a bunch of Roku players to continuously play content featuring the ads in question.
Device farms like these are better known from the world of mobile ad fraud, but internet TV has its own challenges. MadHive estimated in a recent report that more than 20% of all internet TV ad views are fraudulent. In some cases, that's as simple as misleading advertisers about where their ads are shown in order to charge higher prices. "They think they're buying TV, and they're really buying mobile impressions," Helfgott said. In other cases, requests may be made by device farms or bots pretending to be streaming devices.
The same ad, over and over again
Another problem internet TV has long struggled with is the frequency in which ads are being repeated. Seeing the same ad for a detergent over and over again might be annoying, but it's very different to get bombarded with the ad for a politician you can't stand. "It's a major problem," Helfgott said. Streaming services promise ad buyers frequency capping, but that's often tied to averages, resulting in painful outliers.
Frequency capping often also doesn't account for changed viewing behaviors; even seeing an ad just once during a 20-minute episode of a show can seem like a lot when a viewer binge-watches six episodes in a row.
The backlash against campaign ads on Hulu has prompted one subscriber to start a petition in Hulu's community forums to ban political ads altogether, and it's gotten more than 1,100 votes at the time of this writing. "Congratulations Hulu, you've managed to do the impossible and get Republicans and Democrats to come together in total agreement on a topic," another subscriber remarked. "Get the hint before you lose all your customers." (A Hulu spokesperson declined to comment.)
Helfgott believes that it may be time for the entire industry to take the hint and start solving issues around targeting, fraud and ad frequency. "It would be great if political [advertising] could drive that," he said.
In Hulu's case, there's always another option for viewers: The service does offer an ad-free premium tier. At least for some subscribers, election season may ultimately turn out to be a kind of upsell. "Considering upgrading my Hulu subscription precisely so I don't have to watch anymore f***ing Trump ads," one subscriber wrote on Twitter this week.
