Roku Advertising Guide: Costs, Features & Best Practices
In today’s digital age, where streaming has become the primary mode of entertainment for millions worldwide, advertising has evolved significantly. Among the frontrunners in this revolution is Roku, a leading player in the over-the-top (OTT) advertising space.
With over half of the U.S. population expected to use at least one ad-supported streaming service monthly by 2026, learning how to effectively leverage streaming platforms like Roku
has become essential. In this post, we’ll dive into the world of Roku Ads, offering insights, strategies, and practical tips to help navigate and succeed in this space.
What is Roku?
Roku is a pioneering brand in the realm of TV streaming. Since its inception in 2012, Roku has been at the forefront of transforming how viewers access digital content. Roku offers a sleek black box that connects to any TV via HDMI, as well as Roku TVs which are smart TVs that have Roku’s built-in streaming platform, instantly enabling access to a wide array of streaming channels. For those already equipped with internet-connected devices, Roku also functions seamlessly as an app.
The appeal of Roku for consumers lies in its user-friendly interface and a minimalist remote control, which simplifies navigation compared to traditional TV setups or direct laptop connections prone to technical issues. Users can enjoy both free and premium content from popular services like Netflix, Amazon Prime Video, and Crunchyroll, among many others.
Key to Roku’s ecosystem is its Channel Store, a marketplace offering a vast selection of apps catering to diverse interests and preferences. This store spans entertainment, news, sports, and more, ensuring there’s something for everyone. Roku also generates revenue through advertising spots within its platform and by taking a portion of subscription and ad revenues from streaming providers accessed via Roku.
As of the first quarter of 2024, Roku reported 81.6 million active accounts worldwide (Source). More than 100 billion hours were streamed on the platform in 2023, averaging a record of 4.1 hours per day per account in Q4 which is a lot of eyes watching a lot of content.
With the world of streaming and streaming advertising continuing to grow, Roku presents a compelling opportunity for advertisers. By tapping into Roku’s expansive user base and diverse content offerings, brands can effectively reach consumers who are increasingly turning to streaming platforms for their entertainment needs.
“Roku is a major player in the streaming TV industry, offering diverse capabilities that add incredible value to our clients at Tinuiti. Their extensive user data and precise targeting, coupled with their commitment to measurement and their investment in content and FAST viewers through The Roku Channel, consistently provide growth and opportunities for us as partners.”
Adrena May Senior Director, Media Investment at Tinuiti
Costs of Advertising on Roku
Advertising on Roku involves several cost considerations, primarily measured through CPM (Cost Per Thousand Impressions). CPM refers to the cost advertisers pay for every thousand views or impressions of their ad. Let’s break it down…
CPMs Explained
What it Stands For: CPM stands for Cost Per Mille, which translates to “cost per thousand impressions.” In advertising, an impression is counted each time your ad is displayed. So, CPM tells you how much it costs to reach 1,000 viewers with your ad on Roku.
Ballpark CPMs: Industry sources suggest a range of $20 to $60 CPM for Roku advertising. However, it’s important to understand this is a broad estimate. For a more accurate idea of your specific costs, it’s best to consult a Subject Matter Expert specializing in Roku advertising. Also, keep in mind that brands partnering with a performance-first agency, like Tinuiti, should anticipate substantially more efficient CPMs.
Factors Affecting Cost
- Placement: Roku offers various advertising placements, and the cost can vary depending on where your ad is shown:
- Roku Channel Store: This is where users browse and install streaming apps. Generally, it might be less expensive than advertising on The Roku Channel itself.
- The Roku Channel: This is Roku’s free, ad-supported streaming service with its own content library. Placement here could cost more due to the larger audience.
- Roku Content Provider Channels: These are individual channels from various content providers. Costs can vary depending on the popularity of the specific channel.
- Show Popularity: If your ad is placed within a highly-watched show on The Roku Channel or a popular content provider channel, you can expect to pay a premium compared to less popular shows.
- Ad Type: Roku offers a variety of ad formats (highlighted below), and some are inherently more expensive than others.
Remember, while CPM gives you a baseline cost, it’s just one piece of the puzzle. For an accurate picture of your advertising budget, consider factors like total campaign duration, audience targeting, desired reach, and specific ad goals.
Roku Ad Formats & Key Features
Roku offers a variety of ad formats to reach viewers across their platform, including those who subscribe to ad-free channels. Here’s a breakdown of the main options:
- Standard Video Ads: These are classic, non-skippable video ads available in 15, 30, and 60-second lengths. They play in full-screen across popular Roku channels, offering broad reach.
- Marquee Ads: These static image ads appear on the Roku home screen, even for ad-free users. They can include checkout options like sending product information or reminders to viewers.
- Showrooms: Another home screen ad, showrooms are interactive and full-screen. Viewers can browse and click for more details about the advertised product or service. Some showrooms even allow checkout by directing users to the advertiser’s website.
- Roku Screensaver Ads: These cinematic ads take over the screen when the Roku device is idle, similar to traditional TV commercials. They offer a unique and immersive experience for viewers.
- Roku City Ads: Roku City is a unique advertising space offered by the Roku streaming platform. Imagine a digital downtown, a screensaver with a bustling cityscape theme, that appears on millions of Roku devices when they’re not actively in use. This “city” becomes a playground for brands to creatively integrate their advertising.
Additional Options:
- Brand-specific buttons on remotes: Some streaming services have their own buttons on Roku remotes, allowing for quick and targeted advertising opportunities.
Technical Specifications:
- Video Ads: Minimum resolution of 720 x 480p and a minimum frame rate of 30 fps are required. Images within the ad can contain no more than 20% text.
Partnerships Fuel Roku’s Success
Roku partners with various companies to enhance its advertising capabilities:
- Data Providers: Companies like Cox Automotive provide valuable data on purchase intent, brand preferences, and competitor analysis.
- Retailers: Partnerships with Walmart, Best Buy, and others enable shoppable ads, allowing viewers to seamlessly purchase products directly through their Roku device.
- Media Companies: Collaborations with NFL Films, CBS Sports, and others bring premium content to the Roku platform, attracting a wider audience.
- Music Streaming: Integration with Spotify allows for targeted advertising based on user listening habits.
- Measurement Providers: It was recently announced that iSpot will become a preferred third-party measurement partner for Roku, offering direct and programmatic advertisers fast, reliable metrics that demonstrate the unique reach, frequency, verified ad exposures, and outcomes delivered across ads running on the Roku platform.
Roku’s Cutting-Edge Features
- Programmatic Buying: Roku offers programmatic buying of ads which allows advertisers to automate the purchase of ad inventory across various channels and shows on Roku. Programmatic buying on Roku streamlines OTT ad buying, targets audiences precisely, and offers potentially lower costs through real-time bidding.
- AI-powered Ad Placement: Roku’s AI technology can identify iconic moments within its vast content library and place ads accordingly.
- Primetime Reach Guarantee: Roku promises to deliver your ad to more primetime viewers than the average program on a top-five cable channel, ensuring maximum reach during peak viewing hours.
- ACR Data: Roku collects viewing data through a technology called Automatic Content Recognition (ACR) on their connected TV (CTV) devices. This data, including channels, programs, and viewing times, is used to improve targeted advertising.
- The Roku Channel: Roku has its own Free Ad-Supported Streaming TV (FAST) service called The Roku Channel. This is a major selling point, giving users a robust selection of free content without needing additional subscriptions. The Roku Channel features a mix of live TV channels, on-demand movies and shows, including some originals, and even local news stations. With its growing content library and user-friendly interface, The Roku Channel is a strong contender in the FAST wars.
These are just some of the features that make Roku a powerful platform for advertisers. With its diverse ad formats, sophisticated targeting tools, and strategic partnerships, Roku offers a unique opportunity to connect with a large and engaged audience.
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.
You can learn more about Roku’s advertising solutions here.
Roku Advertising Best Practices
Before diving into best practices, it’s crucial to understand Roku’s advertising guidelines. These guidelines ensure a positive experience for both viewers and advertisers. Some key points to remember:
- Ad content must be truthful and not misleading.
- Competitor products or services cannot be directly promoted on Roku.
- Ads must be clearly identifiable as advertisements.
- Technical specifications exist for video resolution, frame rate, and image text content.
Retargeting for Maximum Impact
Roku offers features that enable effective retargeting strategies. Here’s how you can leverage them:
- Utilize Sequential Messaging: Don’t rely on a single ad format. Reach out to viewers who saw your initial 30-second ad with a follow-up marquee ad on the home screen. This reinforces your message and keeps your brand top-of-mind.
- Marquee Ads for Re-engagement: Marquee ads are perfect for re-engaging viewers who might have seen your video ad but not taken action. They offer a persistent presence and can include a call to action to remind viewers about your product or service.
- Showrooms for Deeper Engagement: If someone watched your video ad but desired more information, retarget them with a showroom ad. Showrooms provide an interactive space to explore product details and can even include a checkout option.
Additional Best Practices
- Target Wisely: Roku’s advanced targeting options allow you to reach viewers based on demographics, interests, and behaviors. This ensures your ad reaches the most receptive audience.
- Creative for the Big Screen: Design your ads specifically for TV viewing. Keep it clear, concise, and visually appealing on a larger screen.
- Embrace Interactive Elements: Roku offers interactive ad formats like showrooms. Utilize these to create a more engaging experience for viewers and increase ad recall.
- Track and Optimize: Roku’s analytics tools provide valuable insights into your ad campaign performance. Use this data to optimize your campaigns for better results.
Conclusion
Roku ads offer a targeted and cost-effective way to reach a large audience of streamers. As marketers, understanding Roku’s advertising landscape is key to navigating the ever-evolving world of streaming.
Looking to learn more about Roku advertising? We’d love to help. Check out our TV & Audio Services page for more information, or contact us today.
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