Roku, Hulu Are Re-Imagining Channel-Based Programmatic Platforms. Is it Time to Jump In?

John Donahue, CEO and co-founder, WLxJS

On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.

 Today’s column is written by John Donahue, CEO and co-founder at WLxJS.

Roku and Hulu have both recently brought their new ad platforms to market – and they both have a great opportunity in front of them, with turmoil surrounding Facebook and its practices, and traditional broadcast teams looking for smarter solutions.

But while timing might be right are either really viable solutions? Where can they add value in market?

Historically, Roku and Hulu both have been limited in their ability to establish highly targeted program mixes and audience solutions. But both are quick to point out the maturation of CTV and streaming, which now run across linear TV, desktop and mobile, and bespoke data solutions that enable unique omnichannel delivery of their audiences.

So, have they finally found a way to resolve previous shortcomings? And if so, has one gotten it more right than the other? What should they be focused on to drive long-term success and really offer competitive solutions?

What do Roku and Hulu offer, and how are they different?

Hulu recently introduced its Ad Manager platform targeting small and medium-sized businesses with a self-service solution for activating, managing and tracking their ad campaigns.

And Roku’s new OneView offers a single platform leveraging its TV identity data to manage advertising — across OTT, desktop and mobile campaigns, clearly targeting larger brands as they tout Experian, Intuit TurboTax, Lexus and even progressive upstart Drizly as launch partners.

Roku’s OneView seems to be focused on advancing the TV market, while Hulu’s Ad Manager looks as if it wants to take a bite of the digital “fat middle” where platforms such as Facebook and Google have a stronghold.

Roku: well-positioned – but will it restrict its inventory?

With the conflict between large brands and Facebook as well as the opportunity to grab dollars from traditional broadcast teams, Roku seems positioned to be an immediate winner. It offers brands a place to move at least a portion of their budgets from social and broadcast teams with smarter targeting.

Critically though, the real value in programmatic for large-scale brands is rooted in a few simple but key capabilities: delivering recency, variable pricing and audience targeting with frequency management.

Interoperability with the large solutions such as DV360 and The Trade Desk and the ability to integrate cleanly into the programmatic stack is a must to drive adoption among larger programmatic advertisers. Lack of interoperability will wash out Roku’s value proposition to large advertisers, who will lose significant reach simply because they won’t be able to manage frequency across platforms. So, Roku must avoid separating its inventory into direct vs. programmatic vs. walled garden. Each barrier and friction point added will likely result in lost opportunities for advertisers to buy.

Roku’s dataxu acquisition provides advanced functionality that can be delivered, at scale, at a much quicker pace. But in buying dataxu, Roku has also inherited legacy use cases and requirements – debts that will make it harder to react quickly to short-term needs.

Hulu: Premium content attracts advertisers, but can it compete for TV and social dollars?

Hulu, at face value, isn’t immediately positioned to snap up social dollars from big brands. But this isn’t to say that it won’t be able to attract them, and it already has to some degree – the insurance giant Progressive currently advertises on Hulu.

But from a media-buying perspective, Hulu’s real advantage might actually be its ability to siphon TV dollars. For local advertisers, the opportunity to fit in with “prime-time” content is traditionally extremely limited, and Hulu gives them more opportunity.

Hulu’s new Ad Manager gives small and midsize brands the opportunity to use advanced targeting and place themselves in a premium content environment with low minimum spends. However, that selling point might not persuade savvy small-to-midsize and DTC buyers to move their social media budget.

These brands lean heavily on social to drive massive reach at extremely low CPMs. So while advertising next to premium content with more viewability and/or share of voice and more advanced targeting is certainly tempting, moving dollars away from social would depend on very competitive CPMs that can only be delivered at a scale Hulu doesn’t yet have.

However, TV buyers for enterprise brands and local TV advertisers who’ve traditionally struggled for placements in a premium environment should lean into Hulu due to its unique ability to target audiences on premium inventory.

And media buyers considering adding these platforms into the mix must weigh Hulu’s and Roku’s respective value propositions vs. the value that inventory will actually add to their plans, and what it takes to get them actualized. There’s definitely a sweet spot to be found within the CTV market, but the often-forgotten key to programmatic is the dialogue between vendors and buyers, and CTV will be no exception.

Follow John Donahue (@Johngodzilla) and AdExchanger (@adexchanger) on Twitter.

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