Election 2012 Dollars Stream In

Thanks to super PACs and Hulu's popularity, candidates are spending money, and the site is cashing in

Candidates looking to boost their campaign profile this election season are betting on Hulu. The network’s political ad revenue grew by a whopping 718 percent over 2008, per Hulu; the increase over the midterm elections was even higher. While Hulu declined to provide dollar figures, the service claims political is a big category that helped drive its upfront this year. Brian Wieser, senior analyst at Pivotal Research Group, estimated that Hulu’s total ad revenue for 2012 would be between $400 million to $500 million.

Part of this is the growth of the service, of course—Hulu, with 21.5 million unique viewers in August, per comScore, has only been open for business since 2007—but it’s also a symptom of the rapid expansion in the political market this year.

Political advertising overall is on the rise thanks to super PACs, which can support any political candidate with unlimited funds (so long as they don’t coordinate with the candidate). The names—Crossroads GPS and The Club for Growth—are familiar, but the donors are secret.

The other factor that accounts for the incredible growth is the importance of digital for political ads. “When it comes to microtargeting, that’s where you do it—social and digital advertising,” said one ad buyer at a major agency who places political ads. “The best you can do on traditional TV is to go to cable operators.”

Hulu’s svp of advertising JP Colaco agreed that the ability to focus directly on individual prospective voters was a major selling point for the service. “You can actually target down to the ZIP code,” he said. “You can really target down in those battleground states if you’re trying to target someone specifically.” Women and Hispanic voters, Colaco said, are among the most desirable viewers in this election, and while Hulu doesn’t sell individual shows—you can buy The Daily Show from Comedy Central, and they’ll buy back the Hulu inventory—demo targeting is more desirable for this kind of work, especially in tandem with geotargeting.

There are other advantages to digital. “The Obama campaign, which is a big advertiser for us, is actually using an ad-selector format,” Colaco said. “The idea that you can connect with the user and let them choose the campaign and ad message that’s most relevant to them. Are you more interested in taxes or education or healthcare?” Self-selection, he added, makes viewers feel less bombarded and more in control.

There’s another important factor: social. “Campaigns traditionally have a proportion of dollars they put toward advertising, and then there’s a side they put toward get-out-the-vote efforts,” said the political ad buyer. “Social bridges those two efforts.”