Roku goes after TV dollars with TV-like ad guarantees

Streaming media player Roku is now offering demographic guarantees for TV marketers that use its advertising platform, in hopes of unifying the TV and OTT advertising landscapes. Roku claims it’s the first OTT advertising publisher to offer advertising metrics through Nielsen’s Digital Ad Ratings (DAR) that are comparable to linear TV, calling it a major milestone marker for the industry.

“Consumers are migrating their TV viewing to OTT platforms like Roku, making them increasingly difficult to reach through traditional TV advertising,” said Scott Rosenberg SVP of advertising at Roku. “As TV buyers follow this migration, they need a common currency to plan their investment mix across linear and OTT.”

Roku partnered with Nielsen back in 2015 to integrate its DAR solution into Roku’s Ad Framework platform. Roku has also partnered with comScore to integrate its digital video ratings into Roku’s platform. And earlier this year, Roku partnered with advertising firm Magna to help its brands deliver targeted advertising to Roku’s OTT audiences.

There are a few angles Roku is hoping to play in the advertising space, as connected TVs become one of the more important mediums for watching video content for US consumers: first, Roku sells some of the advertising that appears on its net-top box (NTB) platform, and it obtains data about audience by matching its first party data with third part data sets. The company has thousands of online video “channels” on its platform, many of which are ad-supported niche OTT video channels. In fact, Roku says ad-supported video viewing is the fastest growing segment on its platform, so it makes sense for Roku to want to grow this segment of its business.

Second, Roku has partnered with a few TV set makers to develop a Roku smart TV operating system (OS), and can sell advertising that appears on its TV platform, too. LG, Hisense TCL, Sharp, Insignia are all offering Roku smart TVs.

And finally, Roku has been expanding its relationship with pay TV providers in the hopes of becoming a pay TV set top replacement. Roku released its Roku Powered program a few years ago, which gives pay TV partners access to a white label version of its streaming platform. BSkyB, Time Warner Cable, Comcast and Telstra have all tried out Roku’s streaming pay TV solutions. By acting as surrogate set tops, Roku’s net-top boxes and smart TVs could also help deliver a form of addressable TV advertising, and its census-based advertising platform can give TV marketers more advanced data about viewers. Roku’s audience network spans the gamut of ad-supported TV apps, TV Everywhere apps, and pay TV apps.

Roku’s executives have been vocal about their beliefs that linear TV is on its way out, and even in this press release, Roku took a few digs at linear TV, noting that 40% of its customers have either cut or shaved down their pay TV cord. It also highlighted Nielsen data showing how far linear TV has fallen among the 18-24 age group – those viewers watch 46% fewer hours of linear TV now than in 2012.

Roku is hoping marketers and brands will be more likely to spend on Roku’s OTT ad inventory if it plays by linear TV’s advertising rules, even if it isn’t selling linear TV ad inventory. “Advertisers can ensure their campaign reaches a more complete TV audience, including consumers who are not watching linear TV,” the company said.