Home Digital TV and Video Roku’s Platform Revenue Is Down. Is Programmatic Coming To The Rescue?

Roku’s Platform Revenue Is Down. Is Programmatic Coming To The Rescue?


If you’re tired of TV companies blaming the economy for less-than-impressive growth numbers, too bad – the situation is only getting worse.

Roku reported a mere 1% increase in YoY revenue for the first quarter of 2023. More jarringly, Roku’s platform business – which includes ad sales and streaming content distribution – was down 1% YoY.

The company’s growth rate is already on a plateau, but a revenue decline is something new for its platform business, which had been a reliable double-digit growth driver prior to last quarter.

Roku gained 1.6 million active accounts this quarter, but its average revenue per user is down 5% YoY. The company is chalking up its declines to the ongoing ad spend slump.

With a recession looming on the horizon, the ad market remains “muted,” CFO Steve Louden told investors on Wednesday.

But the ad market is also cyclical, and advertisers will continue to spend despite a shaky economy if they can manage to find what Louden referred to as “stability in uncertainty.”

An open book

Advertisers can already buy Roku inventory through demand-side platforms other than OneView, Roku’s own DSP.

But Roku is planning to partner with additional DSPs to expand its programmatic demand, said Charlie Collier, president of the company’s media business.

Aside from adding more overall demand, some advertisers and agencies only buy programmatic media through one of their preferred DSPs, so Roku is trying to widen its net.

And lowering the garden walls doesn’t stop at inventory access. Roku is also sharing more data with agencies and advertisers through direct partnerships.


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Last week, Roku inked a deal with IPG-owned agency UM to license exclusive access to Roku’s viewership data via its automatic content recognition (ACR) technology. ACR is a monetization opportunity for Roku now that the company manufactures its own smart TVs and has more control over the data generated by the hardware.

Roku also announced a partnership with Instacart this week, so grocery and CPG advertisers can tie online sales to Roku CTV impressions.

These buy-side partnerships come on the heels of Roku’s new primetime reach guarantee, an offer to reach more viewers on its platform than on the top five cable networks.


Speaking of smart TVs, at least those hardware sales are adding to the company’s growth picture.

Device sales were up 18% YoY, largely due to Roku smart TVs hitting Best Buy shelves in March, Louden said.

Although Roku remains a streaming business first, manufacturing more hardware is a logical move and can be incremental to the business.

Companies that both license software and make their own hardware are common in the ad tech industry, said Mustafa Ozgen, president of Roku’s device business.

“We strongly believe that Roku-branded TVs will help the company drive increased market share [in streaming] over time,” he said.

In addition to more control over valuable data, manufacturing smart TVs gives Roku a “full range of innovation,” Ozgen said, including more leverage in advertiser partnerships and brand integrations on its Roku City home screen.

The company didn’t share benchmarks or purchase rates for its new TVs, though.

Between strategizing to snag more ad dollars and selling more devices, Louden said Roku can “take a bigger piece of the [streaming] market.”

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