Mike Hustava, Andrew Harvey, Simon Stuchlik, Kaleb Cypher, and Dustin Loussedes are
MASK’D Communications
Integrated Marketing Strategy
Advertising and Promotion
Monday, May 2nd, 2011
Table of Contents
I. Executive Summary
p. 2
II. Situation Analysis
1. Industry Review
p. 4
2. Hulu Company Review
p. 6
3. Product Review
p. 9
4. Competitive Analysis
p. 12
III. Customer Profile
1. Segmentation & Targeting
p. 17
2. Positioning
p. 18
3. Perceptual Maps
p. 20
IV. IMC Objectives
1. Advertising Objectives
p. 22
2. Budget Allocation
p. 24
V. Media Plan
1. TV: Late Show (Letterman)
p. 27
2. TV: Good Morning America
P. 28
3. Magazines & Newspapers
p. 29
VI. Creative Execution
1. 30 Second TV Spot
p. 30
2. Out-of-Home & Print Ads
p. 31
VII. Sales Promotion Plan
p. 33
VIII. Media Schedule
p. 35
1
Executive Summary
As a representative of Hulu, MASK’D Communications has undertaken the planning
and implementation of an advertising and IMC campaign to enhance Hulu’s position in the
online video realm. Our main objective is to increase consumer awareness about the services
Hulu offers, particularly focusing on the convenience it offers for those unable to watch their
favorite shows because of business obligations. The primary target within this demographic
consists of males and females in managerial and professional occupations, ages 22-45. The
people in this range often travel for work, work more than the typical 40 hours per week, and
may have families with activities that occupy evenings and nights. In the following report, we
will refer to this audience as Business Commuters.
Trying to manage work and family while also finding personal time proves to be
extremely difficult for this audience, so something as simple as wanting to watch their favorite
television program may not happen as often as desired. Hulu can remedy this situation with its
convenience, versatility/flexibility, variety, and high-quality shows and movies. The goal of
MASK’D is to make this group aware of Hulu’s features, eventually leading to more intricate
relationship with the service including preference, usage, and so on. To remind our target
audience of Hulu’s benefits, we will implement the campaign theme of “Never Miss a Show,
When You’re on the Go.” We want to establish the thought in these people’s minds that no
matter how busy they are, Hulu will have their favorite shows ready to watch when they do find
a little time for themselves. Rather than being at the mercy of the TV stations by having to watch
their favorite shows at the original air time, Hulu allows viewers to be in control by allowing it to
watch these shows wherever they are and whenever they want.
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MASK’D will employ various types of traditional and non-traditional media for this
campaign. In the traditional media, we will use a TV spot featuring the casts from some of the
most popular shows featured on Hulu. The actors will be telling viewers they miss them because
the latter keep missing the shows due to their busy schedules. This spot will serve as a reminder
that Hulu has these shows available whenever the viewers have time. Building on the theme of
the TV spot, we will utilize print media with a still shot of one of these shows featured in
different magazines read by our target audience. As in the TV spot, these advertisements will
employ the “We Miss You” concept along with the Hulu logo. This still shot concept will carry
over onto billboard ads, bus bench ads, as well as public transportation ads, media that reach our
audience at the most crucial time – their commute home, when they have missed the show. We
will also make use of other media such as the internet, radio, and newspapers utilizing the same
concept. We will also employ a limited sales promotion plan. Using the same shows across the
different media and advertising outlets will allow us to reach more members of our target
audience and reach our goal of increasing awareness about Hulu to 72,000,000 people, with
3,000,000 new subscription accounts.
Overall, we want our advertising and IMC campaign to establish Hulu as the top online
video site for television shows and movies. Due to its unique position among competitors, none
of which offers a service comparable to that of Hulu, the service has already found its
competitive advantage and market niche. Our IMC plan will communicate this advantage to
consumers, and position Hulu as such. Through our campaign, its brand identity will be one of
convenience and flexibility, but not at the expense of variety or quality; something that no
competitor can offer.
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II.
Situation Analysis
1. Industry Review
The History and Growth of the Internet Video Industry
In the past 5 years, internet video has been the fastest growing medium of all online
services in terms of revenue and users. This number is expected to grow even further in the near
future, with over 190 million people in the United States alone watching video online by 2014.
In November 2009, internet users watched over 30 billion videos in just one month.
Trends in Internet Video Today
The internet video industry today is dominated to a large part by Google sites, including
Youtube. The following chart represents a more detailed breakdown of market share distribution,
as of November 2009:
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Top U.S. Online Video Content Properties* by Videos Viewed
November 2009
Total U.S. – Home/Work/University Locations
Source: comScore Video Metrix
Property
Videos (000) Share (%) of Video
Internet : Total Audience
30,986,670
100.0%
Google Sites
12,215,994
39.4%
Hulu
923,805
3.0%
Viacom Digital
499,497
1.6%
Microsoft Sites
479,638
1.5%
Yahoo! Sites
470,804
1.5%
While short, user-generated video promoted by sites like Youtube still dominate the
internet video landscape today, recent studies have indicated a shift toward long-content video.
This consists of full-length TV shows and movies promoted by services like Hulu and Netflix.
The main reasons for this development include faster internet connections; enabling users to
watch video without long loading times, as well as increasing advertising opportunities making
the long-content format more profitable and thus more attractive.
While internet video appeals to a wide variety of audiences, the younger generation (1829 year old males and females) watch the most videos online. Older generations are catching up,
though, with 45% of all internet users age 50+ watching internet video. A possible future
development is social media video, which is employed by services such as Facebook and is
thought to possess major marketing potential. Another trend to watch in the future is the
transition of online video to the mobile market, as competitors Hulu and Netflix are both
developing applications enabling users to watch their favorite TV shows on their smartphones.
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2. Company Review
Hulu: History & Development
In March of 2007, NBC announced they would be partaking in an online video venture in
which the mission would be “to help people find and enjoy the world's premium video content
when, where and how they want it.” In March of 2008, Hulu.com launched to the public and by
October they offered over 1,000 different show titles. That same month, Hulu was ranked fourth
in TIME magazine’s ‘50 best inventions of 2008’, and won the Associated Press “Website of the
Year” award two months later. Hulu continued to grow through 2009, when Disney was
announced as an Equity Owner of the company, to go along with NBC Universal, News
Corporation and Providence Equity Partners. In June 2010, Hulu launched the preview of Hulu
Plus™, a premium subscription services which enables users to watch more content, on more
devices, and with better quality. In November of last year, Hulu Plus™ officially launched with a
subscription fee of $7.99 per month. Hulu has become a large success in a very short amount of
time and continues to strive toward maintaining their status as a leader in online viewing
innovation.
Hulu: Products and Content
Hulu is an online video service that offers a selection of hit shows, clips, movies, and
more at Hulu.com and numerous destination sites online and across four screens — PCs, TVs,
mobile phones and tablets. Hulu's selection of premium programming is provided by more than
225 leading content companies, including FOX, NBC Universal, ABC, Lionsgate, MGM,
National Geographic, Paramount, A&E Television Networks, PBS, and Warner Bros. Television
Group. Hulu brings together a large selection of videos from over 225 leading content
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companies, including FOX, NBC Universal, ABC, ABC Family, Biography, Lionsgate,
Endemol, MGM, MTV Networks, National Geographic, Digital Rights Group, Paramount, PBS,
Sony Pictures Television, Warner Bros. and more. Users can choose from more than 2,600
current primetime TV hits such as The Simpsons, 30 Rock, Lost, Glee and The Office the
morning after they air; classics like Buffy the Vampire Slayer, The A-Team, Airwolf and
Married...with Children. Hulu also offers a wide array of more than a 1,000 movies and
documentaries; and clips from Saturday Night Live.
Hulu Plus ™
Hulu Plus™ was launched in November of 2010 and is a paid, premium subscription site.
Through Hulu Plus, subscribers have access to a wider range of shows, more episodes of shows,
as well as a better quality of video. Also, consumers can watch directly on iPad or iPhone, and
other mobile internet devices and internet-connected TV’s. Hulu Plus™ streams right to these
different devices, making it easier to watch “what you want, when you want, and where you
want”. Aside from advertising, Hulu Plus is the company’s major revenue source. According to
Hulu CEO Jason Kilar, the demand for the new premium service has "been larger than we
anticipated/projected back in early November," leading to a revenue of $260 million in 2010
(compared to $108 million in 2009 and $25 million in 2008).
Hulu’s Advertising Strategy
“Hulu’s top priority is to create a service that advertisers, content providers and users
unabashedly love. Our strong user experience drives higher engagement which results in higher
advertising effectiveness. Hulu has 25% the video ad load of traditional television minimizing
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clutter and strives to have a strong relationship between the amount of advertising viewed and
the amount of premium content consumed. Elegant companion banners are placed in close
proximity to the player to further reinforce brand messaging. Hulu is committed to the continual
improvement of online ad effectiveness through innovating new and more interactive ad formats
and models that advertisers want. We work very closely with advertisers to continually innovate,
experiment and find the right marketing solutions for their brands.”
To advertise its own service, Hulu relies mainly on traditional TV advertising to get TV
viewers to watch their favorite shows online – and it has been successful. When the company
aired a Super Bowl advertisement featuring actor Alec Baldwin in 2010, Hulu’s business
increased by 49%. This marketing success has been possible despite the fact that according to
Kilar, Hulu neither has nor wants a marketing department organizing such efforts.
3. Product Review
Hulu Introduction and Brand Image
When users think of Hulu, they think of the funny advertisements, their favorite TV show
that they miss all the time, as well as quick and easy streaming of their favorite shows at the
convenience of their personal computers. This casual brand image is important to the company
and functions as its money maker. When people think of Hulu, the company wants to convey the
feeling that its service is simple and, in its basic form, free. Being able to provide such a quality
product without charge is the image Hulu has strived for and successfully maintained. Users
looking for more content and flexibility have the option to sign up for Hulu Plus in exchange for
a modest fee of $7.99 a month, but the basic service of streaming TV shows online remains free.
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Hulu’s Target Market
According to Hulu.com, “the majority of Hulu’s audience is evenly distributed between
men and women in the 18-49 age range.” Adding to that, we believe that this audience consists
of the busy ones: the soccer mom, working late dad, and the high school athlete; in other words,
everyone who may miss their favorite TV shows during the original air time. Looking to the
future, the target market will also grow with the show selection. Senior citizens who generally
have trouble in the digital realm might present a challenge to Hulu, but young children who
overslept Dora the Explorer or Barney would be able to wake up, log on to Hulu (with parental
permission) and watch their favorite early morning cartoons.
Hulu’s Key Strengths and Benefits
Hulu has a distinct advantage over competitors in the online viewing experience for a
number of reasons. The first strength the company possesses is the ability to provide a higher
quality of video than sites like YouTube; mainly due to the fact that the video is uploaded
directly from the Broadcast providers, as opposed to online users. This also allows Hulu to offer
HD viewing, which is becoming the standard for watching any type of program. Furthermore,
Hulu uses Adobe’s Flash Software to stream video, which allows for both HD and Standard
streaming. This software is also an advantage because it can run on multiple operating systems,
increasing Hulu’s reach to a variety of laptop/PC users.
Additionally, Hulu can rely on the sheer volume and range of the TV shows offered. In
addition to NBC, ABC and FOX programs and movies, Hulu carries shows from other networks
such as Current TV, PBS, USA Network, Bravo, Fuel TV, FX, NFL Network, Big Ten Network,
E!, Versus, A&E, Oxygen, and online comedy sources such as Onion News Network. As a
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result, the viewer has a broad choice among programs to watch. Included in the premium
subscription service Hulu Plus is an even larger archive that offers episodes and seasons that run
only in syndication now. Another one of Hulu’s many strengths is that it allows users to become
distributors of the site. Users can embed links on their own personal websites or other websites,
as well as share whole shows or just specific clips. This allows users to be in control of the
technology, making the site even more appealing. Users are in charge of “distribution”, which
adds another aspect to the “Place” part of the Marketing Mix.
Furthermore, Consumers can now also watch Hulu on their TVs simply by connecting a
computer with a streaming capable video card to the TV via HDMI or other connection.
Moreover, the Hulu Plus service, fully launched in November 2010, allows users to access Hulu
from a variety of Blu-Ray linked TVs, iOS devices, gaming consoles, and set-top boxes. In the
recent past, Hulu launched its service to Desktops (Windows, Mac, Linux), Tablets, and even
Smartphones. This concept, along with the strengths mentioned here and the dozens of other
positive attributes of Hulu will allow the company to maintain an edge in the online video market
in the present and future.
Hulu’s Weaknesses
Unfortunately, watching internet videos through Hulu also has its problems including lag,
audio normalization, and streaming issues. Lag is one of the most commonly reported issues
among Hulu users; however, the user’s internet connection can often be faulted because Hulu
and its large amount of supporting network money provide fast servers to help avoid the lag.
Another weakness is the interruption by commercials, even though generally only one
commercial plays during the regular break in the program. Commercials also lead to another
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issue, audio normalization. When a user is watching a video and a commercial comes along, it
tends to be either louder or softer in volume than the show itself. Unfortunately, nothing can be
done about this problem unless the user knows how to download normalization software on his
or her computer. The last issue, streaming, arises when streaming from Hulu to a TV-set-top box
or third-party program to watch shows, such as an Xbox 360 or a Playstation 3. Because Hulu is
constantly trying to improve the service and therefore constantly changes the coding, streaming
through a third-party program can cause lag, freezing, and other issues.
There are general weaknesses within the internet video industry as well. Early on, Hulu
had concerns dealing with third-party sites that also stream the shows. A simple Google search
can give hundreds of links to watch the same show online, often illegally. As users typically do
not care where and how they watch the show online, they have to be persuaded that good video
quality and content variety make it worth having to endure commercials.
Hulu’s Sales History and Market Share
Since the service was introduced in 2007, Hulu’s income has skyrocketed. Pushed mainly
by advertising during its early stage, the company reported $25 million revenue in 2008 and
$108 million in 2009. Thanks in a large part to income generated by Hulu Plus, this trend
continued in 2010 when Hulu CEO Jason Kilnar reported revenues of $260 million – an increase
of over 1000% in just two years. According to Business Insider, because Hulu has to give up a
percentage of the revenue to its partners and various expenses have to be considered, $70 million
of the 2010 revenue can be considered net income.
While Google websites with Youtube as their centerpiece have long dominated the
internet video market, Hulu seems to slowly be catching up. The service ascended into the top 3
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of internet video sites (behind Google and Fox Interactive Media) for the first time in 2009, with
approximately 41 million unique viewers and 380 million videos watched - a market share of
2.6%. And while Google still dominated in 2010 with a 42.5% market share, Hulu is slowly
increasing its share which now stands in second place at 3.2%. Hulu is also gaining ground on
Google in terms of minutes the average user spent watching videos on the site, reaching second
place at 217 minutes per viewer just behind Google (274 minutes/viewer) and far ahead of thirdplace VEVO (a music video website with 89 minutes/viewer). Thus, while Hulu still has a long
road ahead in terms of catching up to the market leader Google, the company is well on its way
to solidify its place as a leading player in the internet video industry.
4. Competitive Analysis
YouTube
One of Hulu's major competitors is YouTube, founded in 2005 by Chad Hurley, Steve
Chen, and Jawed Karim. The company focuses on user-generated videos, ranging from short
amateur home videos to sophisticated creations. This concept was accepted rapidly in the internet
realm, as YouTube quickly ascended into one of the most visited websites. Google, itself an
internet phenomenon, saw the video service's enormous potential and purchased the company a
year after its release, in 2006, for $1.6 billion dollar even though the service was nowhere close
to profitable. Google aided YouTube rise on the internet, where it now is among the ten most
visited websites worldwide and with 70 million unique visitors and 12.8 billion videos posted in
the United States alone (a market share of over 40%) is the clear leader in the internet video
industry.
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YouTube's main issue in its 5 year history has been profitability. The company has relied
almost solely on selling advertising in videos and on banners, which does not pay for website
maintenance and the fast servers required for seamless streaming. Many companies refuse to
advertise on the website because they have little control over what videos their ads will be
associated with, which for a company relying on with little control over content can be deadly.
As a result of net loss and privacy issues, YouTube has started to acquire the copyrights from
record labels and TV conglomerates, planning to integrate a premium subscription service into
the site that would directly rival Hulu and Netflix. But so far, the subscription service has not
been realized. So as a company, YouTube is estimated to have lost $470 million in 2009 alone.
Because it is a private company (though it is owned by Google), little data is available
about YouTube's exact revenues or budgets. However, based on the loss estimates mentioned
above as well as the fact that the service does not advertise outside of its own website, we can
infer that YouTube's actual advertising and promotion budget is rather small.
YouTube's main strength is that users create content for the site for free. They increase
the service's overall value without any additional work at all on the part of the site's creators.
However, while that feature makes the site very popular with people who are looking to upload,
share, and browse videos, it also results in a situation where the company cannot control the
types and quality of videos uploaded. As mentioned above, this lack of control leads to many
marketers being cautious about advertising on YouTube, ultimately resulting in lost revenue.
Furthermore, because of the immense bandwidth required, YouTube places limits on uploaders,
limiting the length and quality of videos created. YouTube's dilemma suggests that services
specializing in fewer types of videos may actually be more profitable. This rings especially true
when the content is copyright protected, long, and of high quality – as is the case with Hulu.
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Netflix
Netflix is a video rental service that, over the years, has become very similar to Hulu.
While users used to order specific DVDs online and get them delivered via mail, the service has
transitioned into being more online-oriented, where viewers can watch the desired videos
directly on the Netflix website. Netflix has expanded greatly in the last few years, with high
revenue and gross profit:
Sales (in thousands)
Total Revenue:
Gross Profit
2009
$1,670,269
$590,998.00
2008
$1,364,661
$454,427
Netflix has increased its market share in the rental market in each of the last years. After
Blockbuster had to file for bankruptcy in September 2010, Netflix emerged as the clear market
leader in the rental market, with a share of 36% ahead of Redbox (25%) and Blockbuster (22%).
In the internet video industry however, the company's market share has been more modest, with
most studies not even mentioning it among the giant YouTube and the quality alternative Hulu.
But this is estimated to change in the near future, as Netflix is expected to gain a more prominent
role in the online video market within the next few years.
This trend can be seen in the company growth, as Netflix acquired 7.7 million subscribers
in 2010 and has indicated that more than 1/3 of those subscribed to online stream only. By the
end of 2010, the company reached just over a 20 million subscribers, which was above the
company’s 19 million estimate. Netflix believes that its subscriber base will grow from between
21.9 million to 22.8 million in the 1st quarter of 2011 alone. The Research firm Credit Suisse
Equity Research estimates that Netflix will reach over 31.3 million subscribers by the end of
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2011. The report indicated that this trend is largely driven by its new online streaming service,
which presents a direct competition to Hulu.
Netflix's market value of about $10 billion contributes greatly to its advertising budget, as
the company has used heavy advertising in order to gain new subscribers. In 2008, the company
spent $195.8 million on marketing itself while only making $71.6 in net income. According to a
career opening for the company's Senior Marketing Budget Analysis, the company has a $300
million annual marketing budget in the United States and internationally at this point in time.
In terms of positioning, Netflix likes to focus on the fact that the customer does not have
to return videos rented, which eases the transition from a mail-order business to internet video.
The company's use of portals such as Yahoo, MSN, and other online browsers has helped gain
awareness of the company even among casual internet users. Netflix also offers free trial session,
allowing potential customers to browse and get a “hands on” experience without the pressure of
making any payments. Affiliates help refer potential customers to Netflix to lead them to a free
trial, while in return the affiliates gain compensation for their efforts. With this referral system,
Netflix seems to be conscious about having positive word of mouth in order to gain more
awareness and support. The message Netflix tries to send to people is that users are able to
instantly watch TV episodes or movies by connecting through multiple devices (such as Wii,
PS3, and XBOX) to your television or computer.
DVR and Digital Recording
DVR is becoming more and more popular in households today, representing a more
indirect competition to Hulu. The hectic schedules many Americans keep on a weekly basis
causes them to miss their favorite programs during the original air time. DVR (Digital Video
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Recorder) solves this problem by allowing people to tape their favorite shows and watch them at
their convenience. They are able to fast-forward through commercials, as well as pause and
rewind when they want to. This concept has become increasingly popular in the United States, as
nearly 40% of Americans now have and use some DVR device. Most of the recorded
programming is watched the same day it's recorded, showing the importance for a video service
that, unlike Netflix, offers streamed shows shortly after they are aired. Thus, DVR technology
and the services Hulu offers are very similar in that they both allow for on demand programming
shortly after the original air time with little commercial interruption. Also, they both offer
programs in HD. DVR only allows viewers to watch on televisions that are connected to a
recording device in the consumer household, although that is starting to change with new
technology. Storage space also limits the number of shows that can be kept on the machine.
One drawback to Hulu since its inception has been that the user needs to watch on a
computer and cannot simply lie back on the couch and watch TV. Hulu has solved that issue with
the Hulu Plus subscription section. By signing up for Hulu Plus, viewers are able to connect
Hulu to their televisions and choose which shows they want to watch, not just from recent
seasons, but also from years ago and shows that have been off the air for years. So, while DVR
and Hulu both allow for on demand viewing, the diversity and variety offered by Hulu makes
their service preferable to DVRs.
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III.
Customer Profile
1. Segmentation and Targeting
In today's world, we feel like we have less and less time to simply sit down and relax to
the tune of our favorite TV show. Thus, many groups of consumers are looking for a product that
can help them watch their favorite TV shows even when they miss the original air time. These
groups include Busy College Students who miss shows because of classes and extracurricular
activities, High School Athletes who miss shows due to night practices and games, and Business
Commuters whose busy schedule leads to them being on the road during prime time. Especially
this last group also evidences that the service needs to be available outside of the home, on as
many devices as possible. Because different people like many different shows, these groups of
consumers look for a large amount of choice that allows them to watch whatever they want.
Furthermore, because many people have a basic but no expert knowledge of the internet
and how to use it, any video service seeking to remedy this need also has to provide an ease of
use that allows customer to navigate to what their choice of program without much effort. In
addition, any substitute for live TV shows can only be successful if the video quality is at least
somewhat comparable to high quality TV. Finally, because lower-cost options such as DVR are
available, most consumers will not accept a service that is high priced with no free alternative.
While Hulu is already fairly popular among college and high school students, Business
Commuters represent a target market that is largely unaware of the service despite its ability to
satisfy the above-mentioned needs. Thus, this group embodies the ideal target market for a
marketing campaign aiming to raise awareness of Hulu. These Business Commuters generally
live in suburban areas around the United States around metropolitan areas in which they work.
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Thus, any marketing campaign should aim to reach this group both in suburban and metropolitan
centers, but also on the means of transportation into these cities.
This Business Commuter group is predominantly between the ages of 22 and 45, and
comprised equally of males and females with the majority being of Christian belief and
Caucasian ethnicity. Born within Generation X and Y, they are generally college graduates, and
members of the middle class with a household size of 1-4 and personal income of $50,000 per
year and up. They can be classified as home owners in suburban environments, and generally
hold managerial and professional occupations. On the VALS (Values, Attitudes, and Lifestyles)
survey they rank as achievers with a deep commitment to career and family, who look for timesaving and convenient devices as a result of their busy schedules and lifestyles. Yet despite their
apparent need for a service such as Hulu, Business Commuters are generally non-users of the
service because they are unaware of it. Because of the ease of use and convenience Hulu offers
as well as the internet-savvy this group generally displays, these consumers are expected to be
medium to heavy users of the service once they are aware of it.
2. Positioning
A major strength of Hulu in terms of positioning is that is the first service of its kind and
therefore has no direct competitor. Other internet streaming services such as YouTube offer a
wide variety of free content, yet they only stream very low-quality video and do not show
copyrighted content such as TV shows. Netflix on the other hand offers high quality streaming
and a wide variety of TV shows and movies, but costs a hefty fee every month and only shows
TV shows once they have been released on DVD. Watching an episode shortly after its original
airtime is therefore impossible. Finally, Digital Video Recorders (DVRs) allow the user to record
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shows they might miss, but these shows are only available at home and only limited space for
recorded shows is available. Hulu combines the strengths of these competitors without any of
their weaknesses: it offers an extensive archive of high-quality TV shows that are available the
day after they aired on TV and on a multitude of devices. Furthermore, the basic service is free;
yet for a monthly fee lower than that of Netflix, the user can purchase Hulu Plus, which allows
access to every single episode ever aired of all shows available on Hulu.
Because of these advantages, Hulu can be best positioned by use and application.
Especially when the user has purchased Hulu Plus, the service can be watched anywhere and
from almost any device ranging from TV and computers to gaming systems such as Playstation
or Xbox, and even mobile devices. Time is also not of the essence, as any episode of the desired
TV show can be watched almost immediately after its original airing. Furthermore, no download
is required as the video is streamed instantly, and the service is easy to access and navigate.
These features cater ideally to the needs of Business Commuters, and should be highlighted in
the marketing campaign. Thus, positioning by use and application best highlights Hulu's main
benefits to the target market.
Following are three perceptual maps that further emphasize the unique position that Hulu enjoys
among its competitors
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3. Perceptual Maps
Perceptual Map #1 – Price vs. Variety of Content
High Variety
Low
Price
High
Price
Low Variety
Perceptual Map #2 – Accessibility: How and Where
Many Locations
Few Viewing
Channels
Many Viewing
Channels
Few Locations
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Perceptual Map #3 – Video Quality vs. Interactivity
High Quality
Low
Interactivity
High
Interactivity
Low Quality
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IV.
IMC Objectives
1. Advertising Objectives
Hulu has no problems with its brand image, as attitudes toward the service are
overwhelmingly positive. However, various audiences are unaware of the service and its utility
to users. Thus, our main objective for this IMC campaign is to increase awareness of the
services Hulu offers to its audiences, particularly the business commuter. Our promotional
campaign, which will run for one year, specifically seeks increased awareness among business
commuters, aiming to increase name recognition as well as adding 3,000,000 user accounts
consisting mainly of this target audience to the 72,000,000 accounts that already exist. To
achieve this goal, our campaign should aim to reach approximately 27.5 million business
commuters during its course. This increase in user accounts should pay dividends in Hulu's
market share, allowing it to remain the number two internet video site behind its indirect
competitor YouTube.
According to numbers released in November 2010, Hulu gained revenues of about $260
million in 2010. The advertising budget as a percentage of sales in 2007 was 7.4% for Cable and
Pay TV services, and 4.9% for Video Tape Rental. Hulu's service is positioned in between the
two, so an advertising budget of 6.2% should be realistic. For revenues of $260 million, the
budget will therefore be approximately $16 million.
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Advertising Objectives - Calculations
Estimated user accounts (most recent fiscal year)
New users for the IMC period [objective]
72,000,000
3,000,000
Trial Percentage (Enter a value between 0-100)
Estimated number of HH that PREFER the brand
80%
3,750,000
Preference percentage (Enter a value between 0-100)
Estimated number of HH that LIKE the brand
70%
5,357,143
Liking Percentage (Enter a value between 0-100)
Estimated number of HH that COMPREHEND.
65%
8,241,758
Comprehension Percentage (Enter a value between 0-100)
Estimated number of HH to be made AWARE.
60%
13,736,264
Awareness Percentage (Enter a value between 0-100)
Target audience for advertising portion of the campaign
50%
27,472,527
23
2. Budget Allocation
IMC BUDGET
Use Table 7-15 to estimate the Ad as % sales for your industry
Advertising as a percentage of sales
6.2%
Estimate total dollar sales (revenue) for your brand
$
260,000,000
Estimated Advertising Budget
$
16,120,000
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
6,450,000
5,100,000
900,000
450,000
3,002,472
1,218,000
1,784,472
3,400,000
1,200,000
1,200,000
1,000,000
3,000,000
3,000,000
267,528
267,528
-
Allocate the total budget from cell B9 among the following items:
Broadcast Media (Chapter 11)
Network Television
Cable Television
Radio
Print Media (Chapter 12)
Consumer Magazines
Trade Magazines
Newspaper
Support Media (Chapter 13)
Outdoor
Transit
Other (e.g., In-flight, In-store)
Direct Response (Chapter 14)
Direct Mail
Catalogs
Infomercials
Telemarketing
Interactive (Chapter 15)
Website
Sales Promotion (Chapter 16)
Sampling
Couponing
Premiums
Contests and Sweepstakes
Rebates
Bonus Packs
Trade promotions (e.g., trade shows)
Total Budget
$
$
$
$
$
16,120,000
24
40%
32%
6%
3%
19%
0%
8%
11%
21%
7%
7%
6%
0%
0%
0%
0%
0%
19%
19%
2%
2%
0%
0%
0%
0%
0%
0%
This Figure is calculated a
should match cell B9.
Broadcast TV
Budget: $6,450,000
TV, specifically Network TV, has to be a significant aspect of the campaign as most
major shows will be originally aired on these channels. For example, advertising Hulu during
morning and news programs could be very effective, as could be promotion of the service during
late-night TV. Thus, the greatest portion of our budget will be allocated to network TV. A
smaller share of the will be apportioned toward Cable TV and Radio, in order to multiply Hulu’s
contact points with its target audience.
Support Media
Budget: $3,400,000
An essential aspect common to our target audience is that they all commute to and from
work every day. Additionally, especially while commuting home from work, this audience will
be the most susceptible to our campaign because they are on the road and unable to watch their
favorite show airing on TV. Thus, the second-biggest portion of the advertising budget will go to
out-of-home advertising, reaching business commuters via billboards, radio, and transit
advertising in subways, on bus stops, and so on. Even in-flight ads in airline magazines can be
very effective, as business professionals now often fly to attend conferences or meet clients.
Print
Budget: $3,002,472
Our target audience is also likely to read newspapers such as the New York Times or the
Wall Street Journal, as well as magazines such as Bloomberg Business Week. Thus, advertising
in these media while staying consistent with the campaign theme will be very effective as well.
25
Interactive
Budget: $3,000,000
Another significant portion of the budget will be allocated to internet advertising. Hulu, as an
internet-based service, should advertise its features with banners leading from popular business
sites such as Forbes.com or wsj.com directly to the service. Users of Hulu will most likely be at
least somewhat familiar with the internet, so contact points in this medium are essential to the
IMC campaign.
Sales Promotion
Budget; $267,528
Finally, a minor amount of the budget should go to samplings and premiums in order to
encourage potential users to sign up for the premium service Hulu Plus. However, as the primary
communication objective of our campaign is to raise awareness among business consumers, this
aspect of the campaign should remain minimal. A more detailed description of our sales
promotion plan can be found in section VII.
Direct Response
Budget: $0
Since this campaign’s main objective is to increase broad awareness of the internet service Hulu,
direct response will not be included in this campaign and should not take away any share of the
budget from more essential areas.
26
V.
Media Plan
1. Late Show With Letterman
In order to best reach Business Commuters, popular shows outside of prime time are the
most effective because Hulu’s target audience will most likely be home and watching. One such
example is the Late Show with David Letterman, a late-night talk show that ranks among the
most popular shows during its time. Following are calculations involving estimates about the
share, reach, and Media Impact when advertising with 100 spots during the year-long campaign:
MEDIA PLANNING
TVHH
number of spots
average cost per spot
average rating
average share
target audience in HH [strategy decision]
Late Show w/ Letterman
116,000,000
100
25,000
0.9%
21.0%
$
27,472,527
Media Impact [estimate: usually be between 20% and 80%]
Total Cost of the media buy [number of spots x average cost/spot]
HUT % [rating/share]
HUT # [HUT % x TVHH]
Exposed Audience (HH) [HUT x share]
Exposed Viewers
Exposed Target Viewers [Media Impact x Exposed Viewers]
CPM (Cost per Spot/Target Viewer)
CPRP (Cost per Spot/Rating)
Reach (Target Exposures/Target Audience)
70%
2,500,000
4.29%
4,971,429
1,044,000
4,000,000
2,800,000
8.93
27,778
10.19%
$
$
$
Media Schedule:
Spot
1
2
3
4
Exposed
Viewers
4,000,000
4,000,000
4,000,000
4,000,000
16,000,000
GRPS
NET REACH
AVERAGE FREQUENCY
Media Impact
70%
70%
70%
70%
Target
Exposures
2,800,000
2,800,000
2,800,000
2,800,000
11,200,000
Reach Non-Reach
10.192%
89.81%
10.192%
89.81%
10.192%
89.81%
10.192%
89.81%
40.77%
65.05%
40.77
34.95%
1.167
27
2. Good Morning America
Another popular show outside of prime time that is frequently watched by business
commuters before they depart for work is Good Morning America. Its remarkable average share
combined with relatively low costs per spot make this show a desirable marketing opportunity.
During our campaign, we plan on running 65 spots on Good Morning America. The Net Reach,
GRPS, and Average Frequency of advertising on Good Morning America are as follows:
MEDIA PLANNING
TVHH
number of spots
average cost per spot
average rating
average share
target audience in HH [strategy decision]
Good Morning America
116,000,000
65
40,000
4.3%
37.0%
$
27,472,527
Media Impact [estimate: usually be between 20% and 80%]
Total Cost of the media buy [number of spots x average cost/spot]
HUT % [rating/share]
HUT # [HUT % x TVHH]
Exposed Audience (HH) [HUT x share]
Exposed Viewers
Exposed Target Viewers [Media Impact x Exposed Viewers]
CPM (Cost per Spot/Target Viewer)
CPRP (Cost per Spot/Rating)
Reach (Target Exposures/Target Audience)
40%
2,600,000
11.51%
13,351,351
4,940,000
8,000,000
3,200,000
12.50
9,393
11.65%
$
$
$
Media Schedule:
Spot
1
2
3
4
Exposed
Viewers
8,000,000
8,000,000
8,000,000
8,000,000
32,000,000
GRPS
NET REACH
AVERAGE FREQUENCY
Media Impact
40%
40%
40%
40%
Target
Exposures
3,200,000
3,200,000
3,200,000
3,200,000
12,800,000
Reach Non-Reach
11.648%
88.35%
11.648%
88.35%
11.648%
88.35%
11.648%
88.35%
46.59%
60.93%
46.59
39.07%
1.193
28
3. Magazines & Newspapers
Outside of advertising on Network TV, we also plan on utilizing various print media in
our advertising campaign. Naturally, we will focus on media prominently read by business
professionals, which includes magazines such as Fortune and Bloomsberg Businessweek, as well
as newspapers such as the Wall Street Journal. Each of these media is focused toward business
professionals, raising the media impact on our target audience and making these
magazines/newspapers an extremely attractive opportunity for Hulu. The following calculations
estimate GRPS, Net Reach, and Average Frequency for each of these three print media:
MEDIA PLANNING
Fortune Bloomsberg Businessweek Wall Street Journal
5
4
6
$ 132,000 $
139,500 $
297,412
875,520
917,568
1,678,498
number of ads
average cost per ad
total circulation
target audience
27,472,527
Media Impact [estimate: usually be between 10% and 80%]
Total Cost of the media buy [number of ads x average cost/spot]
Target Exposures [Circulation x Media Impact]
CPM
80%
$ 660,000 $
700,416
$ 942.30 $
80%
558,000
734,054
760.16
Media Schedule
Spot
1
2
3
Exposed
Audience
875,520
917,568
1,678,498
1,793,088
GRPS
NET REACH
AVERAGE FREQUENCY
Composition
80%
80%
90%
Target
Exposures
700,416
734,054
1,510,648
1,434,470
Reach Non-Reach
2.55%
97.45%
2.67%
97.33%
5.50%
94.50%
5.22%
89.63%
5.22
10.37%
0.504
29
$
$
80%
1,784,472
1,342,798
1,328.92
VI.
Creative Execution
1. 30 Second TV Advertisement
Our 30 Second TV Spot will consist of a collage of the most popular shows available on
Hulu. Throughout the spot, the cast of these shows will tell the audience that they miss them
because the audience wasn’t able to watch their show this week. The casts will them join
together in telling viewers not to miss their shows anymore, before a reel with the Hulu logo, its
most popular shows, and the campaign slogan is shown at the end.
We Miss You.
The Office
NCIS
Modern Family
House
30 Rock
Shark Tank
Family Guy
All Shows together
Hulu Reel:
Never Miss a Show,
When You’re on the Go
30
2. Out-of-Home and Print Advertisements
The concept for our out-of-home and print advertisement will build on the theme
advanced in the TV spot. Trade magazines and newspapers will show the cast of a popular show
on Hulu, with the caption “we miss you” displayed prominently. The ads will also show Hulu’s
logo as well as the campaign theme “Never miss a Show When You’re on the Go,” together with
a reference to the service’s website. This theme will be continued throughout numerous out-ofhome media, including – but not limited to – billboards, bus stations, and trailers. By building
directly on the TV advertisement and keeping a consistent theme, our audience will be able to
more easily recognize and recall Hulu. Thus, this integration throughout the various advertising
media is essential to building product awareness, the central objective of our marketing
campaign.
Billboard Advertisement
31
Bus Stop Advertisement
Trailer Advertisement
32
VII.
Sales Promotion Plan
While this marketing strategy aims primarily at building awareness of Hulu in general, a
small part of the budget will be allocated toward sales promotion. This consumer-oriented sales
promotion plan will implement a free trial strategy of the Hulu Plus premium feature. The Hulu
Plus trial will run for one week and will give users complete access of Hulu Plus without forcing
them to be fully subscribed. The one week trial gives access to things such as watching favorite
shows on multiple devices including TV, mobile, and gaming consoles. The free trial lets users
experience what Hulu is truly capable of and keeps them on as monthly subscribers.
33
In addition to this 1 week trial, we will to cater to our secondary target market of high
school and college students and their busy schedules. Any student that signs up with an ‘.edu’
email address will automatically have their free trial upgraded from 1 week to 1 month. We
understand that busy schedules are a big part of any student’s life, so we will extend our offer to
a full month to ensure that students get the full Hulu Plus experience.
34
VIII. Media Schedule
Running an integrated marketing campaign in various media requires an elaborate media
schedule that enables us to reach our target market as much as possible. Thus, the following
media flowchart shows our differentiated use of media as well as how our IMC budget is
allocated amongst these various media. It is spread out and used in reference to the percentage
used in the budget. Consequently, network television is used through the majority of the year,
while sales promotion, which only takes up a small part of the budget, only runs during very
specific times.
As Hulu is an interactive website, we decided to promote in this medium throughout the
entire year. Network television was also used through many months, excluding the summer time.
Business Commuter will be indoors through the winter months and have time to take more notice
of advertising on the television, while during the summer time they are more likely to be outside
conducting business in the cities and towns. So as they are driving, riding, or walking outside,
they will be passing various out-of-home advertisements set up by Hulu in the summer months,
from billboards or various forms of transit such as bus stations. Radio is aimed toward the
summer months as well because business commuters are more likely to travel in better weather,
leading to a better chance for radio listeners. Advertising in trade magazines is focused toward
the beginning of the year in order to get viewers to notice and gain awareness of Hulu. Finally, a
portion of the budget is allocated to newspapers that pick up through the spring and summer
months to continue product growth.
35
MEDIA
Broadcast Media
Network Television
Cable Television
Radio
Print Media
Consumer Magazines
Trade Magazines
Newspaper
Support Media
Outdoor
Transit
Other
Direct Response
Direct Mail
Catalogs
Infomercials
Telemarketing
Interactive
Website
Sales Promotion
Sampling
Couponing
Premiums
Contests and Sweepstakes
Rebates
Bonus Packs
Trade promotions
1
January
2 3
4
5
February
6 7
8
MEDIA FLOWCHART
March
April
May
June
July
August
September
October
November
December
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
36