If you’re not a regular subscriber to Wired magazine, it’s worth the 5 bucks next time you’re at the airport if only to read the feature article on the new Fox/NBC online TV venture called Hulu (or you can just read it for free here). The Hulu story is a great lesson in new product marketing by not one, but two large, stodgy corporations with much of their business stuck in the status quo. Jason Kilar, the 36 year-old Hulu CEO managed to throw together an online television program with thousands of shows in a matter of weeks.  Hulu is growing rapidly and starting to challenge YouTube.

Aside from the outstanding innovation case study, Hulu is serving as a new benchmark in the future of advertising and mass media. The company is still showing advertising, as expected, but it has significantly decreased the number of ads as compared to traditional broadcast television. According to the article, Hulu is charging more but serving far fewer ads.

Let’s say the average prime-time cost per thousand viewers (CPM) ad rate is $25, which is a reasonable estimate. Television shows are averaging 8 minutes of commercials for every 30 minutes of programming, which means 16 30-second slots at $25 each. This makes the “effective” CPM for a program equal to $400.  On Hulu, the company claims that ad rates are “two to three times” that of broadcast TV. Let’s call it 2.5 times on average, meaning the ad rate is $62.50. However, Hulu is only showing two minutes of advertising per 30-minute show, or only four 30-second ads. As a result, it’s take is $250 per show, meaning that for every viewer who watches The Office on Hulu instead of regular TV, NBC loses 47% of its ad revenue.

You can’t protect old business models artificially.” - Peter Chernin, President, News Corporation

How is Hulu getting away with this? Well, the company realizes that the only way to win in online video is to put its consumers first and provide more value. And it believes great content and a modest amount of advertising will be satisfactory for the greedy online video viewer. The hope is that viewers rely on Hulu versus YouTube and other free and/or illegal options such as BitTorrent. The results seem strong so far: One analysis suggests that Hulu could beat YouTube in revenue this year.

Aside from dramatically cutting the amount of advertising per program, there are some other user-friendly marketing options here. Hulu sometimes offers the chance to select which ads you see. And there is a thumbs-up/thumbs-down button for advertising, which supposedly helps ensure that you receive better interruptions in the future.

I certainly do not believe that Hulu represents Meaningful Marketing.  It still relies on an interruptive advertising model that gets in the way of the content viewers actually want to see. But Hulu’s moves and early success are proof that the only way to win in the future is to get closer to what people want.

Side Note: While Hulu shows a dramatic decrease in advertising, the Chicago Tribune just revamped its newspaper to increase advertising to 50% of the total content.

“Best page takeover ever!”

“This is an idea that I would have said, ‘It will never work!’”

“One of the most brilliant pieces of digital marketing I have ever seen.”

These are just a few of the quotes I heard from friends who forwarded me a link to YouTube’s viral video takeover in support of Nintendo’s new game, Wario Land.  Check it out here and then return to this blog for further analysis….

Pretty cool, huh? Let’s delve into the Meaning and Marketing benefits.

In terms of Meaning, you have to start with the fact that Nintendo selected a media platform that is entirely dedicated to consumer engagement. People viewed nearly 5 billion videos on YouTube alone in July 2008.  People choose to go to YouTube mainly for bite-sized entertainment during their day. They are looking for entertainment, and the medium is successful in part because it does not force viewers to sit through interruptive commercials. Thus, the only way for marketers to win in this channel is to create entertainment that people find valuable. And we can easily measure the consumer value - and to a certain extent the business impact - of YouTube creative by counting the number of views of brand videos. Dove’s Evolution video has more than 10 million views combined, but this controversial Snickers ad only has about 400,000 views. You can’t buy YouTube viewers - rather, you’ve got to create work that people find worth watching.

To date, YouTube has been mainly used by marketers to host viral videos and consumer generated video contests. But this Nintendo work breaks the mold and shows great promise for the marketing on this still-new channel. Many viewers likely come to the page initially because of an interest in video games, the Wii and the Mario series specifically. But all are rewarded with a surprising, fun concept that is executed flawlessly.

We cannot see the business impact for sure, but it looks promising so far. In terms of number of views, on Wednesday, 9/24, the site had 500,000 views, and a day later it was at 1.1 million. The ad unit iself is generating free press coverage. Game marketing is a lot like movie marketing - the initial buzz and opening sales are critical to long-term success. We’ll have to track how it performs, but this is a great head start.

My one negative comment on this example is that I don’t think it’s scalable. It works as a one-hit wonder for Nintendo, but will the next YouTube takeover be as surprising or fun? And imagine the work it takes the YouTube team to both dream up this idea and execute it on their system. When you have to make a cool creative idea every time (rather than just sell mass eyeballs), it becomes a lot harder for both YouTube to sell and clients to buy.

That said, I feel more bullish on YouTube as a digital marketing professional, and I feel that both the Nintendo AND YouTube brands have provided a special experience for me.  Bring on the next one, guys.

Let’s face it: A lot of nonprofit marketing campaigns are horrible, despite the fact that their messages can and should be very meaningful - and their media placement and advertising development are often provided pro bono. Too often, nonprofits cannot decide if they want to raise money or raise awareness. And they tend to start the creative process by going straight to print ads or 30-second commercials, because, well, it’s free. Pro-bono creative work often means that the agency goes into la-la land with its work.

But some nonprofits are understanding how to make a bigger impact by starting with the needs of their audiences. My current favorite is the two-minute video above from the British Heart Foundation. Here, the group recognized that they need to add value to the audience by educating them on what a heart attack feels like.

That in itself is an outstanding creative brief for an advertising agency to receive. And Grey in the UK took this assignment to an amazing place. Instead of checklists or cuteness, Grey went for the jugular with a very realistic, first-person, long-format video. The acting is great, the editing is outstanding, and there is a real, emotional pull with the first-person view. It’s not really a video; it’s an experience.

I’m a little disappointed that this has less than 100,000 total views on YouTube, which suggests this hasn’t hit the viral takeoff point yet. But I’m not privy to how this is airing and being received in the UK.

Kudos to the British Heart Foundation and Grey UK for going way beyond the typical, and giving us killer creative that makes meaning in people’s lives.