Roku, the online streaming TV service, is aiming to fuel growth via advertising and a capacity to show the direct business results of that advertising.
“Our ability to demonstrate effectiveness is unlocking larger and larger budgets,” founder and CEO Anthony Wood claimed in a quarterly earnings call. “Already around two thirds of the average top 200 advertisers have worked with Roku,” he added.
Roku now has 23.8 million active accounts, a 43% rise on Q3 2017, and platform revenue, which includes income from advertising services such as video ads, audience development and brand sponsorship advertising, is growing far faster than player revenue, which covers the hardware end of the business, at 74% year-on-year compared to 9%.
The brand believes that ultimately all TV – and consequently all TV advertising – will be streamed and has developed an ad platform that not only enables advertisers to serve targeted, relevant ads but also to measure the effectiveness of those ads and their return on investment.
Scott Rosenberg, general manager of Platform Business explained that “in the last quarter, almost half of every ad impression that ran on our platform was associated with some sort of research study in which we were showing back to the brand the ROI of their investment with Roku”.
The Measurement Partner Program boasts eleven partners (Nielsen, comScore, ResearchNow, Nielsen Catalina Solutions, Acxiom, Experian, Oracle Data Cloud, Kantar, Placed, Factual, and Polk), each measuring a specific part of the marketing funnel.
So Rosenberg could, for example, correlate exposure to an ad for Carnival Cruises on Roku with a 46% lift in visits to their website, or prove that ads on Roku drove 160,000 incremental visits to Jack-in-the-Box stores.
But perhaps the most influential type of measurement Roku is doing, he suggested, “is we’re leveraging our ACR [automatic content recognition] data to show an advertiser who they reached through their traditional linear investment and, more importantly, who they didn’t reach and who they could be reaching if they were investing in OTT”.
Wood added that 10% of 18-to-34-year-olds now watch their TV on Roku but advertiser budgets have not shifted to reflect that development.
“The biggest obstacle there is would be just the way the advertiser is used to buying ads, just their traditional spending pattern and so by using measurement and ROI analysis, we can help move that along by showing advertisers that this new way of advertising really, really works.”
Sourced from Roku, Seeking Alpha; additional content by WARC staff