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Hulu’s ‘Ad Swap’ puts users in control of what commercials to watch

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Streaming video service Hulu today has added a new Ad Swap feature, which gives its users a new level of control over the commercials that play during the course of a TV show or movie.

The new advertising feature is intended to improve the ad experience for people watching the commercials as well as brands by improving ad targeting. For example, I could choose to view a Samsung mobile phone commercial instead of the one about a female shaving kit.

Basically, when a commercial begins playing, users can click on a new Hulu Ad Swap button in the top left corner of the video player. Clicking the button brings up three different choices of ads that are customized using whatever data Hulu has collected about each individual user.

The downside is that if you choose a different ad, you essentially have to watch it from the beginning — thus making the commercial break longer. However, it’s a small price to pay to avoid having an annoying Old Navy commercial’s jingle (inspired by ’80s pop star Tiffany) stuck in your head for days.

The advertiser whose ad initially began to play is not charged for that impression, according to Hulu, which calls this a win-win scenario since advertisers aren’t wasting money on impression that have no impact.

Hulu is also being reasonable about the number of users who will actually use this new feature.

“Going forward, we are not expecting all Hulu users to swap ads every time they are offered the option to swap,” wrote Hulu Director of Research & Sales Strategy Bryon Schafer in a blog post. “The power behind Hulu Ad Swap is that a user has maximum control over their ad experience, and can swap their ad if they choose to do so. In fact, we expect response rates of around three percent.”

The option to choose which commercials play is yet another feature in Hulu’s advertising arsenal, which helped bring in more than 600 major advertisers and a projected $500 million in revenue by the end of 2011.