Hulu debuts ad units catered to binge watchers

Hulu on Thursday rolled out "binge" ads that only appear for users who are binge-watching a certain TV series. The ads are co-branded with Hulu in an effort to make them feel less intrusive and commercial than regular TV ads.

Why it matters: Hulu Vice President and Head of Advertising Platforms Jeremy Helfand says that in total, 50% of ad-supported viewing hours on Hulu take place in a binge-watching fashion.

Details: The new ads only begin to appear during the third episode of the viewer's experience. They are meant to reward viewers who are spending lots of time on Hulu consecutively. There are two types of new binge ad formats:

1. Ad-free episode: These ads offer an ad-free episode courtesy of an advertiser. The ads appear for 10 seconds with a customized message to let the user know that they've unlocked an ad-free episode, sponsored by an advertiser.
2. Promotion ads: These ads allow advertisers to peddle promotions, courtesy of Hulu. For example, Cheez-its, one of Hulu's commercial launch partners for binge ads, will be offering consumers $1 off of their product for watching the ad.

The new ads will launch with Cheez-its, Makers Mark and Sparkle paper towels as exclusive ad partners. Publicis, one of the world's largest global ad agencies, will be Hulu's agency launch partner.

The big picture: Hulu has been tinkering with ways to create new types of ads that are less intrusive and more aligned with modern TV viewers' behavior habits.

• In January, Hulu rolled out "pause" ads, or ads that appear on a users' screen when they hit the pause button while watching a show.
• In June, Hulu debuted its "viewer-first" advertising philosophy, which contends that ads should be consistent, relevant and immersive for viewers. From an advertiser's perspective, the ads will be more effective if they're enjoyed by the consumers. As part of that philosophy, Hulu launched an ad frequency cap.

Be smart: Hulu is one of the few TV streaming companies that's relying on ads to grow its business. In May, Hulu Senior Vice President and Head of Advertising sales Peter Naylor said that 70% of its viewers are on the ad-supported plan.

• Helfand says that the company's goal is to have 50% of its ads revenue come from selling less-disruptive advertising formats within three years.

Go deeper: Hulu debuts "pause ads" in effort to make TV ads less annoying