Roku Advertising Skyrockets, As It Uses Measurement To Lure Budget From Linear

Of the $70 billion in national TV ad spend, Roku’s Q3 cut was $100 million. But the over-the-top (OTT) platform and device manufacturer is gunning for more, using its relatively new measurement program to convince advertisers to divert linear spend to OTT.

Roku touted that $100 million milestone on Wednesday, noting that its platform business, which contains revenues from subscriptions and mostly ads, was up 74% YoY. Read the release.

Although 10% of 18-to-34-year-olds now watch TV on Roku, advertiser budgeting doesn’t reflect that shift, according to CEO Anthony Wood. Roku hopes its measurement program can convince top advertisers to move more budget from linear into OTT.

Scott Rosenberg, Roku’s GM of platform, claimed that every Roku ad can be tied to a mid- or bottom-funnel KPI. Roku showed Carnival Cruise Line a direct correlation between its Roku ads and website visits, Rosenberg said, and it proved to Jack in the Box that Roku advertising generated 160,000 incremental visits.

“We’re leveraging our ACR (automatic content recognition) data to show to an advertiser who they reached through their traditional linear investment, and who they didn’t and who they could’ve reached if they’d invested in OTT,” Rosenberg said.

Roku’s platform business wasn’t its only growth spurt. Streaming hours grew 63% YoY, to 6.2 billion, and average revenue per user increased 37% YoY to $17.34. The company also said that Roku TVs account for more than one in four smart TVs sold in the US.

Meanwhile, Roku’s player business – its consumer hardware – generated $73 million, a 9% YoY increase. Its total Q3 revenue was $173 million, up 39% YoY.

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