Understanding the impact of mood management on viewing behavior and ad engagement. ARF Annual Conference RE!THINK March 20th 2017

1. CONTEXT EFFECT:
HOW MOOD IMPACTS AD RECEPTIVITY
Julie DeTraglia
Head of Hulu Ad Sales
@HuluInsights
Barbara Leflein
President & Founder
Leflein Associates, Inc.
@LefleinInsights

2. BACKGROUND
THE TRUTH ABOUT AD RECEPTIVITY
After two waves of Ad Receptivity
research, here is what we know:
 Ad receptivity is psychological not
demographic
 No receptivity is a small segment,
LOWS are the ones to watch
 Purposeful viewing has a positive
impact on ad viewership
 A change in ad options can go a
long way
Distribution of GenPop TV Audience 13-54
Base: General population Phase 1 (n=1,660), Phase 2 (n=1,650)
Source: Leflein Associates, April 2015 & December 2015
Red text indicates Significant difference between Phase 1 and Phase 2 at 90% CI

3. OBJECTIVE
HOW MOOD IMPACTS THE VIEWER JOURNEY
This new research
explores
A) When and why
viewers choose a
particular TV
platform
B) The impact of mood
management on
viewing behavior
and ad engagement.

4. METHODOLOGY
Three Phase Research Study
All respondents in
Phase II & III subscribed
to both:
Hulu Limited Ads
AND
Regular TV
Phase I: Statistical Analysis of Waves I&II
Relaxed situations contribute to increased ad-viewership on Hulu
Phase III: Online Survey (New)
A national sample of 500 persons 13-54 used to examine Hulu’s
platform advantage
Phase II: Hypnosis Focus Group (New)
This method enabled us to elicit respondent descriptions of their moods while
watching shows on Hulu vs TV

5. THE VIEWER JOURNEY
CHOOSING BETWEEN PLATFORMS

6. A WINNING COMBO:
CONTROL, MOOD MANAGEMENT & COMMERCIALS
Getting
commercial
time down to
a reasonable
amount
Making it
easy to find
things to
watch
according to
my moods
Giving me
more control
74% vs. 21% 73% vs. 20% 72% vs. 18%
Q5. In your opinion which does these things better, Hulu or regular TV?
Hulu vs. TV
Base: Total = Watch TV AND Hulu with limited ads (317)

7. VIEWERS WANT CONTROL OVER THEIR
TV SCHEDULES
59%
63%
66%
68%
69%
69%
70%
71%
I use Hulu for a comic relief between movies or other intense shows
I save shows to watch on Hulu with others
I use Hulu to find and sample new shows
I have so many favorites that I use Hulu to catch up on the shows that
have conflicting schedules on TV
I use Hulu to fill time when my favorites are not airing
I save shows to watch on Hulu for a time when I can savor them
I save shows to watch on Hulu alone
When I find a show that's new to me, I use Hulu to catch up on
previous seasons
Q12. Use Hulu these ways: OFTEN/ALWAYS
Base: Total = Watch TV AND Hulu with limited ads (317)

8. SITUATIONS DICTATE PLATFORM CHOICE
Base: Total = Watch TV AND Hulu with limited ads (317)
Distracted
30%
33%
36%
57%
51%
47%
Wake up & start
my day
As background
noise
Rushed & have
limited time
Neutral
33%
44%
36%
46%
Exercising Sitting down to eat
Purposeful
48%
56%
66%
43% 39%
29%
Get home from
school or work
Relaxing before
going to bed
On a lazy weekend
Q1. Please indicate whether you would turn to regular TV or Hulu

9. MOODS INFLUENCE PLATFORM CHOICE
Base: Total = Watch TV AND Hulu with limited ads (317)
Relaxed Moods
56%
66% 67%
30%
25%
26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
You're relaxing with
loved ones and you
want to prolong that
feeling of bonding
You've had a bad
day and want some
comfort
You've worked hard
and now you want to
treat yourself
Agitated Moods
45%
47%
36%
40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
You're nervous or tense and
can't think about anything but
your troubles
You have great exciting news
but you have to kill time before
you can share it
Q3. Please indicate whether you are more likely to turn to regular TV or Hulu

10. Base: Across all platforms: watching a full hour of a show that’s not a favorite (n=277), one of their favorites (959), number one favorite (424)
Source: Leflein Associates, April 2015
100
121
146
Not a favorite Among their favorites #1 favorite
Index of commercials they'll watch
if show is a favorite or not
PURPOSEFUL VIEWING HAS
POSITIVE IMPACT ON AD VIEWERSHIP
Regardless of platform,
viewership of commercials
increases with favorability toward
the show. When watching one of
their favorite shows, the
likelihood to watch the
commercial increases by 21%;
and 46% more likely if it’s their
favorite show.

11. EVEN THE LOWS ARE MORE LIKELY TO WATCH
ADS ON HULU IN RELAXED SITUATIONS
51%
45%
62%
30% 29%
36%
Total Low receptivity Medium receptivity
You mentioned that you {always/often/sometimes} avoid commercials.
But are there situations when you are more likely to watch commercials?
RELAXED SITUATION SUMMARY
(in bed, laying on couch, lazy Sundays)
Hulu Limited Viewers
TV Only Viewers
Base Ever avoid ads 2015: Hulu limited viewers (213), TV only viewers (210), Low recep Hulu (65), Low recep TV (67),
Med recep Hulu (59), Med recep TV (53)

12. HOW TO DO IT RIGHT

13. 59%
31%
Q2. How would you rate Hulu and regular TV when it comes to putting you in a
good mood?
5 STARS
BECOME THE GO-TO PLACE FOR
MOOD MANAGEMENT
“If I’m in a bad mood,
the first thing I’ll check
is what shows I watch
are waiting for me on
Hulu. And if I see that
little icon that says you
have episodes waiting.
That alone makes me
feel better. I’m like
sweet. That will uplift
me.”TV
Base: Total = Watch TV AND Hulu with limited ads (317)

14. SUPERIOR FEATURES ENHANCE
THE VIEWER EXPERIENCE
64%
65%
70%
71%
72%
76%
76%
77%
79%
80%
80%
81%
82%
82%
Ad Selector
Captions
Movie Trailers
Notifications
Homepage slider
Hulu Originals
One longer ad
Top Picks For You
Hulu Exclusives
Watchlist
Video Timeline / Scrubber
Searchbar
Commercial count-down timer
Auto play
Q11. Give Hulu Top 2 Box rating in appreciation for these features
Base: Total = Watch TV AND Hulu with limited ads (317)

15. KEEP AD MODELS
RELEVANT, TARGETED, LIGHTER
62%
63%
68%
69%
79%
80%
The commercials on Hulu are more relevant than
the commercials on regular TV
The commercials on Hulu are more entertaining
than the commercials on regular TV
I'm more likely to watch commercials on Hulu than
on regular TV
Compared to Hulu, regular TV has more low-
quality commercials and "infomercials"
The commercial breaks on Hulu are less disruptive
than those on regular TV
Hulu is a friendlier place because it has less
commercials than regular TV
Q6. How much do you agree or disagree with these statements?
Agree somewhat/strongly
Base: Total = Watch TV AND Hulu with limited ads (317)
Q8. When are you more likely to watch/sit through ads?
When
watching
regular
TV
15%
When
watching
Hulu
47%
Both the
same
38%