Top brands and agencies who gathered at Roku's Growth Summit in New York agreed that TV streaming advertising has become a critical component of any brand’s marketing stack.
Despite the collective optimism, certain marketers are still not deploying the full spectrum of opportunities in streaming. Some are still heavily invested in traditional TV, even though streaming has surpassed cable as recently as June 2023 as the top way to consume TV. Others doubt streaming’s reach or its measurability as a driver of ROI.
Below we share three takeaways from the September event that highlight specific opportunities in streaming, and explain Roku’s role as a publisher, platform, and partner to advertisers.
The sharp rise in ad-supported streaming is due in part to the cost of premium services. Many viewers who dropped their pricey cable subscriptions initially embraced multiple paid streaming services. As these services’ cumulative costs began to rival cable, viewers sought out free and ad-subsidized streaming services — and found deep libraries of quality content. People learned how to “subscription hop” — paying for a service only long enough to watch a selection of premium shows, then canceling. A viewer might binge on Ted Lasso on Apple+ and then toggle to a free platform for their next show.
This price sensitivity has propelled ad-supported services to grow at a faster rate (29%) than non-ad subscription-based services (20%).¹ And we’ve seen that when viewers drop a subscription service, their advertising-based video on demand (AVOD) viewing surges. An analysis of Roku user data found that the average subscription churner increased AVOD viewing by three hours in the first month.²
Roku is a publisher. The rise of AVOD is only possible because viewers can find quality TV shows and movies for free. The Roku Channel is a great example. A top-five channel on the Roku platform, The Roku Channel reaches 100 million people in the United States with over 80,000 movies and 350 live linear channels.³ Advertising on The Roku Channel offers marketers access to audiences that are often unreachable through linear TV ads. In fact, 90% of the audience for Roku Originals are exclusive to brands’ linear TV campaigns.⁴
“AVOD doesn’t mean less premium – we're seeing more and more A+ stars gravitate toward us. They understand the value of the platform and reaching people at scale in a way that only broadcasters could previously do,” said David Eilenberg, head of content at Roku Media. “They also like not being behind the paywall, being accessible to their fans. It’s a more appealing consumer proposition to give viewers something that delights them for free.”
All marketers want to shorten the path from discovery to purchase. While they’ve long relied on search and social to achieve this, experts at the Growth Summit noted the strides streaming TV has made in driving commerce. Roku’s Director of Ad Innovation, Peter Hamilton, envisions a future where nearly everyone will make purchases from their TV screens. Roku data backs this trend: 57% of Roku streamers have paused an ad to shop for the advertised product online and one-quarter have shown readiness to buy directly via their TVs.⁵
Roku is a platform. Roku has led the way with the launch of shoppable Action Ads with partners including Walmart and DoorDash. The ads are a hit with consumers, and on the backend, Roku is using machine learning to analyze every tap of the remote for signals that can strengthen reach and optimization. We have also developed best practices for Action Ads, such as delivering calls-to-action early in a commercial and driving users to mobile to increase conversions.
At the Growth Summit, Hamilton, said that he believes TV will evolve into an all-encompassing shopping hub.
Marketers are all-in on search and social, and with good reason. These channels offer incredible reach and ROI data. Some of these advertisers may not realize they can get similar results from streaming TV ads. Just as Instagram insights can guide future campaigns, streaming too offers granular data for more targeted campaigns.
Roku is a partner. Roku has a team dedicated to helping you holistically understand your campaign’s performance and make streaming a growth engine for your business. With first-party data from 73.5 million active accounts, Roku ensures your message reaches the right audiences. Meanwhile, Roku’s ad platform OneView can identify your total addressable market, predict reach, and provide recommendations for how to allocate budgets. When it comes time to measure and optimize performance, OneView offers in-flight attribution tools that calibrate reach, frequency, and performance and determine the effectiveness of each campaign. We even offer metrics about linear TV viewership via our automatic content recognition (ACR) technology.
Ryan Bopp, associate director of integrated planning at Brunner, said TV streaming’s reach and measurement have made it central to the agency’s marketing efforts.
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¹ Comscore CTV IntelligenceTM, CTV devices. March 2020-March 2022. U.S.
² Average Hours Spent Streaming AVODs Among SVOD Churners January – August 2022
³ As of Q4 2022
⁴ Roku Internal Data, 2022; Nielsen Streaming Video Ratings, All Households, June 2022
⁵ Roku + Harris Poll Study, 2022 ; Roku Internal Survey