Roku reported healthy growth during its Q2 earnings on Wednesday, touting the importance of OTT and its newfound place in the advertising market. While the brand is primarily known for its smart TVs and apps, Roku is driven by the rising importance of OTT and the evolution of how TV ads are bought and sold.
“Data-driven selling [and] programmatic-based techniques are, in our opinion, a central component of the future of the way TV advertising is going to be traded,” Roku CFO Steve Louden said during the earnings call with investors.
In June, Roku launched its Audience Marketplace that attracted media giants like Fox, Turner and Viacom. The programmatic solution includes the Roku Ad Insights Measurement suite that was created in partnership with Nielsen.
“From the very beginning, our goal with advertising at Roku has been to elevate [and] evolve the state of advertising—to make TV advertising natively targetable, interactive [and] much more highly measured like any digital media that a modern marketer expects,” said Louden.
A majority of ad revenue on Roku is still being generated by publishers on the platform, the company explained, and Audience Marketplace was a way to help publishers remain competitive. Roku participated in TV Upfront season for the first time in 2018—an experience that left a lasting impression on Roku founder and CEO Anthony Wood.
“I think the big takeaway for us [is] that this is really the first year that advertisers are are proactively planning for OTT as part of their annual TV spending plan,” Wood recalled, adding that they have a team to handle traditional TV ad sales as well.
“This is an exciting time to be in the streaming business,” said Wood. “The massive TV ecosystem is moving to modern platforms with streaming at the center of a more dynamic and innovative approach to content distribution.”
Roku climbed to 22 million active users in the second quarter of 2018 who streamed 5.5 billion hours of content. Revenue grew 57 percent to $156.8 million.