Hulu, a popular video streaming site, has restructured their advertising cost structure in favor of marketers. They will only charge for ads that have been watched in full.
Although this may seem like a gamble, Hulu’s ad-videos pop up much like a commercial break on traditional TV. If viewers want to watch the rest of their program they need to sit through it. They claim their completion rate for ads is 96%, which is 15% higher than most online long form video.
Hulu expects that the lost revenue from half completed ads will be quickly made up by brands competing for the last available spots.
Because of Hulu’s network television-like programming, they will be able to succeed with this new ad structure. Other video websites like YouTube and Vimeo are formatted quite differently, and a pay per-fully viewed ad method would not be worth it.