I can’t think of companies better positioned for literally being ordered to stay at home than Zoom and Roku.
I’m taxing this article from fieldf on another forum, I hope they don’t mind.
The article is specifically about an incident of ad fraud (not involving Roku) on the Roku platform but there are some investor gems buried in there I’ll get to shortly.
The story is that an ad tech company owns some apps that sells ad inventory to advertisers, including big brands like Geico through a variety of other Ad tech companies including TTD. The fraud occurs because the ad companies thought they were purchasing ad inventory on CTV shows and instead their ads were placed on other apps in Roku like screensaver apps or pet entertainment apps(while owners aren’t home).
The fraud occurs because as the article mentions CTV ads are the most valuable and highest margin ad space in the digital world at $25 CPM or $25 per thousand impressions(Roku has said average $30 CPM in conference calls). In comparison most digital inventory gets a few dollars ($3-5) CPM. So this app was buying $3-5CPM inventory and selling it as CTV inventory and viola bid buck fraud.
Roku responded that if you buy direct from them this will never be an issue. Dataxu?
Roku’s developer guidelines prohibit screensavers from running video ads, but the exploited app developers didn’t label their screensaver-like apps as screensavers, effectively working around the policy.
“When buying directly from Roku or trusted publishers, we can assure buyers that their ads will appear on channels certified for monetization on our platform. Furthermore, we developed our operating system and own the ad-tech stack and the first-party data that ensures that we offer a best-in-class ad experience and meet industry best practices,” a Roku spokesperson said.
So besides the CPM talk there the article had some other nuggets.
Roku is currently the top platform in CTV in terms of scale. Our research showed that in 2019, 59% of all programmatic OTT/CTV ads went to Roku devices. While others are gaining ground, like Amazon at 19%, “Roku remains the top platform by quite a bit,” Nasir said.
multiple platforms have noted a recent rise in CTV ad requests.
Viamedia, a monetization platform for cable TV groups, saw a 30% increase in OTT revenue between March 9 and March 19. Beachfront Media, a video-focused SSP, said it saw a 92% increase in CTV requests during the week of March 12.
So while no direct statement on ROKU ad revenue one could surmise they are seeing a similar increase in ad impressions and revenue. And as can be seen Roku has a very dominate position in CTV programmatic ads on its platform. 59% vs #2 FireTV at 19%.
Other sources are discussing the shifting budgets towards CTV.
For the most part, ad buyers are looking to the TV networks to help them find alternative inventory rather than rushing to cancel campaigns, according to agency executives. Both sides recognize that the networks cannot plug their sports programming gaps with anything that would attract a comparably large and broad audience, “so it’s about how do we redirect and try to reach those audiences. That’s mostly been redirecting to digital video, OTT and advanced TV,” said Adam Simon, svp and executive director of strategy at UM’s IPG Media Lab