This week, Roku entered into an agreement to acquire Nielsen’s Advanced Video Advertising business. This acquisition includes Nielsen’s video automatic content recognition (ACR) and dynamic ad insertion (DAI) technologies.
In the following blog post, we discuss the recent rise in popularity of Roku advertising and how the acquisition is expected to impact marketers.
The value of Roku advertising is on the rise. Why?
Roku is one of the earliest pioneers of dedicated TV streaming and has been providing viewers with digital shows since 2012. The Roku OTT streaming device is a deceptively simple black box that connects to a TV and allows it to display streaming channels normally only accessible via laptops or mobile devices, such as Netflix, Amazon Prime Video and Hulu.
The difficult truth is that traditional TV advertising is dying out. TV viewership is dropping, and as a result, so are advertising budgets. More people are moving to streaming devices like the Roku, and it’s time advertisers made that shift as well.
There are 52 million Roku devices in use as of the end of 2019, which accounts for 18% of sales for the global market. This places it heads and shoulders above its closest competitor, Amazon Fire TV, which only accounts for 12% of the market. Google-powered operating platforms like Chromecast and Android TV only account for 9% of the market’s total sales.
In terms of actual viewership, Roku Inc. surpassed 50 million active accounts on its streaming platform. The company’s preliminary estimated data for the fourth quarter ending Dec. 31, 2020, showed 51.2 million active accounts, which reflected an increase of nearly 14 million accounts in 2020. This equates to tremendous advertising potential for brands.
Why is Roku acquiring Nielsen’s Advanced Video Advertising Business?
According to the announcement, the acquisition is an indication of two initiatives including:
- Accelerating Roku’s launch of an end-to-end DAI solution with TV programmers.
- Further integrating Nielsen ad and content measurement products into the Roku platform.
According to Louqman Parampath, VP of Product Management at Roku:
“Tens of billions of dollars continue to be spent annually on traditional TV advertising. Combining Nielsen’s AVA technology with Roku’s innovative ad tech and scale will enable us to deliver the benefits of TV streaming advertising to traditional TV. Roku will bring the promise of DAI to the market for the first time ever at scale —providing better targeting and measurement for advertisers, creating easy integration and additional revenue opportunities for programmers’ ad sales teams, and improving the TV experience for viewers.”
How will this impact advertisers?
1. Roku will eventually enable TV programmers to replace traditional TV ads with targeted ads in real-time.
What this means is marketers can minimize over-frequency in live linear TV plans and improve ROI by bringing Roku data and attribution into traditional TV advertising.
“We are uniquely positioned to accelerate dynamic ad insertion with TV programmers. Roku has the scale, the direct consumer relationships, and the OneView ad tech stack to deliver. Over time, we expect to expand DAI to other TV manufacturers.”
2. This will allow integration of Nielsen’s ONE to standardize TV streaming measurement.
Roku will substantially expand Nielsen’s footprint to measure advertising. Nielsen ONE provides a clear view of campaign reach and frequency across linear programming, streaming, CTV and digital. You can learn more about it here.
“Roku’s vision is to utilize Roku’s OTT streaming data PLUS the scale of Roku’s automatic content recognition data derived from its operating system footprint (Roku’s OS software is embedded in 38% of the US smart TV market) to deliver ads to audiences and manage frequency across traditional and streaming platforms on Connect TVs. Their ability to do so will require partnership from the networks and apps, but the promise of a more unified and addressable Connected TV marketplace is closer than ever before.”
– Jesse Math, VP of Planning and Platforms at Tinuiti
Next steps for advertisers
Roku offers advertisers a variety of options that take full advantage of the unique media platform. From traditional 15- to 30-second spots to full-screen interactive video and interactive overlays. Every single advertising format is an opportunity to engage with customers in new and immersive ways.
To learn more about how to start advertising on Roku, check out our recent post.