“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
When Roku launched The Roku Channel in 2017, its purpose was to serve as a hub for licensed third-party content to woo audiences toward streaming and away from traditional TV.
In 2019, Roku publicly insisted original content didn’t have a place on the road map.
But its stance quickly changed as viewership continued to fragment and advertisers began to demand more – and unique – inventory.
Last year, The Roku Channel started courting original content.
It’s a move that makes sense.
“The larger the distribution becomes, the more engagement we can drive with our advertisers and the more we can monetize and invest in content,” said Katina Papas Wachter, head of ad sales and strategy at The Roku Channel.
It’s what you might call a virtuous cycle. “Bringing out such a large quantity of content all at once allowed us to really understand our users – as well as bring in new ones – and patch holes in engagement, whether that be through our licensing strategy or original content,” she said.
Currently, The Roku Channel hosts about 75 original titles, with many more in the works. Next month marks the first time Roku will debut its originals for its advertisers at this year’s upfront.
The channel reached about 80 million households in Q4 alone.
Papas Wachter spoke with AdExchanger.
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AdExchanger: What is The Roku Channel’s relationship with the rest of Roku’s business?
KATINA PAPAS WACHTER: The Roku Channel requires a connective tissue between the programming team and the ad sales team. I work directly with the programming team on the content that’s coming in and then thread that needle through to our advertisers to help inform their buys.
For the first three years [2017-2020], the majority of our business strategy relied on licensed content and making it easy for streamers to find content. Over the past two years, we’ve focused on the addition of our license library to build out exclusive, original content. We bought and licensed the Quibi content library and acquired the This Old House production studio [last year].
The reason The Roku Channel has grown is because of the platform connection: understanding what users want and the content they’re missing.
Between licensed and original content, which is The Roku Channel’s biggest growth engine?
For the audiences on our channel, it’s a mix. But for the ad sales team, the growth engine is originals.
It’s partly because we’re bringing in younger, more diverse and more affluent users that traditionally might not have spent as much time in ad-supported video-on-demand but are being pulled in by new shows, like The Newsreader. And we’re able to message these shows to them on our home screen, too.
Originals mean net new content for the advertising community and new ways to partner with us. Advertisers have been so used to working with us in an audience-buying capacity, but we’re seeing a lot of growth because they can go deeper buying inventory now that we have our own IP.
What role does the addition of live content play in that transition?
It’s about optionality.
We survey our users often and the idea for live TV was born out of those surveys. Users wanted a live channel guide, which is ironic because people cut the cord but still want the creature comforts they’re used to with live channels.
Live TV is a way to give users the same choice we’re offering through VOD (video on demand). It brought in new audiences, but existing audiences also go back and forth watching live content one day and VOD the next.
How does The Roku Channel approach measurement and attribution?
We need to be able to bridge the gap between content and performance. We can’t only say we see changes happening; we have to prove the efficacy of making those changes.
Four years ago, many of the brands we worked with were coming to connected TV for the first time and trying to figure out the potential of streaming compared with traditional TV. The post-campaign impact was huge in terms of scale because The Roku Channel functions more like a linear TV play [as a virtual multichannel video programming distributor, or vMVPD].
Original content brings together the beauty of TV with the brains of digital, and we have a robust measurement program that allows us to vet new partners and handle different types of channels. Even when advertisers don’t proactively say what exactly they’re looking to measure, we have a learning agenda to make sure we can prove what we’re saying with numbers.
What metrics or KPIs do you prioritize?
It runs the gamut. Some advertisers work with us for upper-funnel reach and branding, and we also have lower-funnel measurement solutions within our OneView DSP for performance-focused advertisers who want cost-per-action and mid-funnel metrics like purchase intent. An audience-first focus helps us move advertisers down the purchase funnel faster.
But in both cases, the most important thing to our advertisers, especially those with a linear TV focus, is incremental reach, which we can measure using automatic content recognition. In Q4, for example, we found that 91% of adults aged 18 to 49 reached with an ad on The Roku Channel hadn’t seen that ad on legacy TV.
We use first-party data, but we also have a pretty diverse list of preferred partners we work with to ensure we’re not just grading our own homework.
Who are some of those partners?
We have broad-based solutions as well as more specific measurement solutions for different verticals.
We partner with Nielsen, for example, and we also have a unique partnership with Kroger Precision Marketing that allows us to use their retail media network to target and measure CPG campaigns.
What’s next on the road map?
We’re investing heavily in our original content. We’ve already committed to 50 new titles over the next two years.
And we also want to support our advertisers leaning into incremental reach. It’s another tool in the kit to allow brands to go deeper in their media buys with us via our original content.
This interview has been edited and condensed.
