Photo: Hulu

Hulu is rolling out "pause" ads, or ads that appear on your screen when you hit the pause button while watching a show.

Why it matters: It's part of a broader effort by Hulu to make advertising for TV content less intrusive and more relevant. The majority of Hulu's subscribers pay for the ad-supported tier, for which Hulu just recently lowered the price.

How it works: When a user hits the pause button while watching a show, an ad will show up on the left-hand side of the screen against a gradient shading. The ad has no sound and disappears as soon soon as the user hits play again.

Between the lines: Hulu says Coca-Cola and Charmin have signed on as its beta partners for the launch.

  • While those are expected advertisers for this format (users usually pause shows to grab a snack or use the restroom), Hulu head of ad platforms Jeremy Helfand says the format could work for many advertisers, so long as the ads are contextually relevant.
  • Helfand says nearly 80% of Hulu content is now watched in the living room, up from 70% a few years ago. A pause ad is suited for large-screen viewing, where presumably users are passively consuming content for a longer period of time.

The big picture: The effort comes amid an industry-wide push to be more innovative around advertising. Most networks and TV providers are beginning to use data and tech to target more personalized ads. AT&T is also testing a similar pause ad function.

  • The TV industry has recently become more motivated to change its old-school way of delivering ads because consumers are largely rejecting ad-supported programming, instead opting to purchase ad-free subscription services like Netflix.
  • Hulu thinks that if it can serve people better, more relevant ads, users will be open to ad-supported programming. As of now, the majority of its users actually subscribe to Hulu's ad supported tier.

The bottom line: While TV consumption has changed the way viewers consume content, the reality is that TV advertising hasn't yet caught up with the times.

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