Hulu to Test Programmatic with Facebook and Oracle

This fall, Hulu is going to team up with Oracle’s data management platform and Facebook-owned video-ad platform LiveRail to sell its inventory programmatically for the first time.

During Hulu’s Upfront presentation in April, Peter Naylor, the platform’s senior vice president of advertising sales, said that programmatic means two things for Hulu: media automation and data. Under the agreement, Hulu will combine its first-party data and Oracle’s data to let advertisers personalize their campaigns on the platform. At the same time, it will leverage LiveRail’s Video Private Exchange (VPX) to drive campaign effectiveness and results.

Jeff Hirsch, chief marketing officer of personalized video ad company SundaySky, thinks Hulu is smart to create a private exchange with formidable industry players like Facebook and Oracle.

“It should come as no surprise that Hulu is making inventory available programmatically,” Hirsch says. “With the quality of inventory that Hulu can provide and the means to deliver value against this strategy, advertiser demand via this channel will be significant.”

At the same time, he is worried that Hulu’s inventory could be devalued in a programmatic manner because computers don’t pitch a product like real salespeople.

“I think it will be interesting to see how the balance of [Hulu’s] ad-supported viewership plays out, as well as the push/pull of having a direct sales force in conjunction with a programmatic offering,” he adds.

But James Bourner, head of display and real-time bidding at Jellyfish Online Marketing, holds a different view. He believes that private exchange can help Hulu keep the value of its inventory.

“Private exchange is brilliant for publishers. In this case, it gives Hulu more careful control over who can buy its inventory and at what price,” Bourner explains. “Through private exchange, Hulu can give its inventory to trusted advertisers, have a dialogue with them and keep their conversation going, instead of throwing its ad impressions to anyone in an open exchange.”

The only potential risk in this partnership, Bourner points out, is that Facebook might tell advertisers that they can only access Hulu’s inventory if they use LiveRail, forcing fragmentation in the programmatic market. While Hulu is making a big push in ad sales, the company is reportedly also launching an ad-free option this fall, which will cost about $13 per month.

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