Louqman Parampath, Roku’s VP, Product Management – Advertising, explains why he believes that outcomes-based campaign measurement is the ‘future’ of TV advertising.
What are the key trends you’re seeing in the connected TV and addressable TV ad space?
The larger point is that the whole thing is happening with the backdrop of more and more streaming across the world. The shift to streaming has only accelerated if you look at the last two-and-a-half years with the pandemic – a transformation that would have taken eight or 10 years. The promise of streaming from an advertising perspective is it brings the best of TV together with one-to-one targeting and one-to-one measurement from digital.
One of the themes we are talking is advanced targeting, moving away from targeting just based on age and gender, which is historically how TV has been bought, towards more granular targeting segments. We’re also talking about how measurement is evolving from just reach and frequency to measuring outcomes and performance, and how even large advertisers and large TV investment teams are looking at lower-funnel metrics and ways in which they can actually look at the outcome of a campaign and marry that back to the exposure of that particular campaign.
TV advertising has been around for decades, and reach and frequency management have been important considerations for nearly as long. How do you address those concerns as you try to encourage advertisers to move towards a more outcomes-based approach?
Our philosophy has been that we do both [brand and performance measurement]. We do believe the future is performance-based and outcomes-based, but it will take some time to get there. These are teams that have measured the value of media spend in a particular way for quite some time, so we do give them the tools to measure their advertising in the way they have historically measured it. We provide reach and frequency reporting. We work with Nielsen to offer digital ad ratings. We were also one of the first platforms to enable automated content recognition (ACR) three or four years ago, because we can use that data to provide the true, deduplicated reach on our platform. We have done that and will continue to do that. But, at the same time, we work with 20-plus measurement partners across the funnel, so you can measure not just brand lift and awareness, but also ROI and marrying an ad buy to footfall traffic or people buying your product. The way we solve this is by supporting both [brand and performance]. We see some advertisers – digital-first, B2C enterprises – looking at outcomes already. The TV investment teams are slowly getting there.
How do you reconcile more traditional approaches like marketing mix modelling (MMM) with digital media measurement?
You would think, as digital becomes more common, people would move away from MMM to attribution and so on, but part of the reason [this isn’t happening] is the challenge of identity. As third-party cookies die away, and device identifiers slowly fade away, some of the value of MMM is coming back. As a platform where all sorts of advertisers want to buy from us, we want to support multiple ways in measuring spend. We want to support every advertiser and however they want to validate their investment.
Commerce has been talked about in relation to TV for years, but that promise hasn’t yet been realised. Roku has announced a partnership with Walmart – where do you see this space at the moment?
Because we control the operating system, and because streaming doesn’t have to just copy what has historically been done in traditional TV, we will always offer capabilities beyond 15- and 30-second spots. We have bespoke ad units that can give the advertiser an opportunity to spend time with a consumer who is interested in that particular product and then drive higher results.
We’ve always had interactive ad capabilities in the platform. We launched the capability to send an SMS from an overlay quite some time ago, and to send a coupon via email or via text. What we have done is gone one step beyond that and said, ‘Can we shorten the conversion funnel, and ultimately get a user to actually buy a product from an interactive overlay on a video ad, especially for products that the user may be interested in?’ We can bring all the targeting and optimization we have on our ad platform OneView and marry that with the shortened conversion funnel for the consumer here. However, to do that very well, we needed to work with a retailer.
Walmart has experimented with these kinds of [shoppable] formats on social, on live TV and other platforms. This brings together their large footprint with the 60 million-plus consumers that use Roku. We have an opportunity to truly stretch the boundaries of commerce on television and create ad experiences that drive users to convert on the platform. The interactive overlay takes the user to a single ‘buy now’ option. You can press the ‘OK’ button on the Roku remote, and then an overlay comes up with prefilled credit card information from Roku Pay. You click on that and then receive a confirmation email from Walmart saying that we have put you have purchased this product.
A lot of TV commerce innovations have tended to involve a second-screen, but this is all using the TV device. Was that deliberate?
We have tried some of these [second-screen] experiences as well, but [with this approach] we can completely shorten the conversion funnel and have the entire thing happening on the TV. The advantage to us then is that Walmart will take care of end-to-end fulfilment. We use our relationship with the consumer to help them make that purchase, and we make it very clear to the consumer that they’re buying from Walmart.
Is the partnership over a fixed-term or a set geographical area?
It’s US-based for now. We will look at expanding it, but the key goal for us is to test with a number of products in the second half of this year – primarily starting with Walmart products – and then we’ll expand to more suppliers and merchants as we learn more. We’re still very much in the early stages of TV commerce and shoppable ads, and there is a lot of iteration and experimentation to be done to actually get the consumers to buy.
Are you working with Walmart on how to develop creative best practice for commerce ads?
Absolutely. We have been testing this for quite some time. Typically, an experience like this works very well when the underlying 30-second ad – it works less well with 15-second ads – gives you the time to draw the user in and there is a clear call-to-action telling the user this is an opportunity to buy this product directly. And then you can show the overlay to click and buy.
How far do you hope to have come in 12 months’ time?
With shoppable ads, there’s still a lot of work to do here. This is just the start, we need to learn from our consumers. We’ve been testing for two or three years but we think that getting users to buy in mass from the platform, there is a certain habituation of consumer behaviour that needs to happen. That’ll just take some time. We’ll continue to improve and iterate.