Example of Roku’s display ads are like this:
On the right, the box to watch Brave on Amazon Prime. That’s an add.
On my roku there’s an add to rent or buy GLASS from the sky store.
That box there is pretty much the only box I ever see. Sometimes it gets my attention with something I want to watch.
Publishers are basically paying ROKU to help direct traffic to them. Similar to sellers on amazon, paying amazon to list their item above others. I have no idea how much roku gets from this, but I can’t imagine it’s a significant amount in the grand scheme of things.
How much inventory is ROKU selling?
…when those apps, when that content comes to Roku, we participate in the economics of that content. So, in general, we are excited about it. And as a platform, we add tremendous value to their efforts on the Roku platform, both in terms of being able to market and grow their audience on Roku, as well as help them monetize through ad sales and data relationships.
So, in general, we’re excited to see that. And our focus as a company is in moving people out of linear TV into OTT and we view these services as helping accelerate that trend. We are as you point out in your second question very focused in helping TV advertisers reallocate their TV spending, but that’s not the end of the opportunity for us. There are a lot of digital video dollars spent throughout the ecosystem that often are also looking for a better home whether because it’s longform, its premium content, it’s in the living room, it’s brand safe.
And so that is also part of our ad strategy is to be engaged with direct-to-consumer brands, digital-first brands, helping bring them to the Roku platform and invest. At the end of the day, our strength, our power as a platform comes from our first-party relationship with customers from control of the OS and the ad stack from our broad reach across the ad ecosystem. And so again back to your first question, we view those capabilities as helping us to participate and benefit from all this increased activity in AVOD OTT.
That’s from the Roku CC. It’s what TTD is trying to do with CTV!
IRDoc, just to clarify. ROKU does not add additional ads to your viewing content. Netflix, for the time being, never has any ads, so you would not have any if you accessed it via ROKU. ROKU just has access to inventory to sell. I.E. on the hulu channel, on an episode of Seinfeld, HULU might allocate 20 seconds in the middle of an episode for an ad. Roku wants that space to sell, so using data and mumbo jumbo science, it finds someone who would most benefit from placing an advert and filling those 20 seconds, who would thus pay more for that slot than anyone else. Everyone wins, Roku takes a cut. Just like TTD
As to who’s platform/AI is better, Roku or TTD, who knows. But ROKU has the platform and thus data to work with, which gives them an edge.
As for not caring what smartTV OS is in your TV, yes that is a good point. Noone really cares at the moment. We’re in the early stages. But they have the momentum here and are clearly dominating the market. From 1/5 TVs, 1 in 4, to now 1 in 3.