How Hulu’s ‘Steamboat’ ads recommend new shows to users

Hulu, like all video services, has long been focused on growing its viewership, but also on keeping those viewers watching more and more shows. While it’s mostly been building that audience by featuring popular new programming, it’s also building out a recommendations system to introduce viewers to new content. One way that it’s leveraging those recommendations is with a set of ads specifically aimed at getting users hooked on programs they might not have known about.

Recommendations are one area in which Hulu had lagged other video services — most notably Netflix. (s NFLX) While Hulu does have a recommendations section, it’s not front and center like Netflix’s recommendations, which take up the majority of the user’s homepage. Instead, Hulu reserves most of its homepage for most recent episodes, popular clips and featured content. If you scroll down below the fold and have connected your Hulu and Facebook accounts, you can see what your friends have watched. And if you scroll all the way down to the bottom, you’ll be hit with recommended shows — but who goes that far down the page?

But the company recently updated its recommendations system a few weeks ago, and makes recommendations while viewers are watching a TV episode — or actually, once they’re almost finished. At the tail end of some TV episodes, users will be shown a brief video clip of a recommended show, usually with a message that says something like, “Hey [USER], did you know that people who watch [THIS TV SHOW] are five times more likely to watch [THIS OTHER SHOW]?”

Hulu refers to the units internally as Steamboat ads, based on Walt Disney’s Steamboat Willie, the first cartoon to feature synchronized sound. The official name for the ads, which it shares with its partners but isn’t quite as sexy, is “Smart TV Promos.”

Hulu’s head of advertising, JP Colaco, told me in a phone interview last week that the Steamboat ads were a big part of the company’s plans for introducing users to new TV shows. “Our DNA comes from Amazon,” (s AMZN) Colaco told me, referring to CEO Jason Kilar’s time at the online retailer. As a result, Hulu is following the same type of recommendation model that was so successful at Amazon.

The idea is that if a user likes a certain type of content, he or she will be more inclined to choose another piece of content that a similar group of users would like, and Hulu will hopefully offer up something that they’ll like or can get excited about.

So far, the ads appear to be working — Colaco said Hulu is seeing a massive amount of interaction for the Steamboat ads, with about a 10 percent response rate — or 10x greater than the industry average for online video ads. That’s important, especially as Hulu continues to add more content for viewers to choose from.

With programming from ABC, (s DIS) The CW, (s TWX)(s CBS) Fox, (s NWS) NBC, (s CMCSA)(s GE) and Univision, Hulu now has in-season content from five of the top six major broadcasters, with only CBS abstaining. Hulu Plus subscribers have more than 44,760 TV episodes and 2,575 movie titles to choose from, with the free, ad-supported site boasting more than 36,880 TV episodes and 1765 movie titles.

It’s seen both an increase in unique users and video views. Its audience grew to 34.5 million unique viewers in November, according to comScore, (s SCOR) which is an increase of 23 percent over the previous year. It’s total views have also grown more than 20 percent, to 2.4 billion video streams in November.

Then again, Hulu’s just getting started with the new recommendations system. And as time goes on, hopefully it will be able to leverage that system to get even more loyal viewers watching even more shows.