Roku recently announced the launch of its self-service ad platform, Roku Ad Manager. For all the hype, how will this impact CTV publishers? Will this transform how streaming television is monetized? What about Roku’s stock price? Let’s dive into this real quick.
Roku’s launch of its own self-serve ad platform is likely to enhance monetization for FAST channels on The Roku Channel. If this pans out like Roku wants, this will be a welcome development for the many FAST channel owners with content on The Roku Channel, who so far have been underwhelmed by Roku’s ability to monetize their channels. Roku has been trying to alleviate concerns by giving some of the largest publishers their backfill advertising inventory back to fill themselves and giving free promo spots out to everyone. Roku is betting that self-serve advertisers will help free the gaping hole their current programmatic revenue stack has left for the hundreds of publishers with channels on TRC. We’ll see.
The big question here is how this will, if at all, transform how streaming television is monetized. By providing a self-serve option, Roku can attract a broader range of advertisers, including smaller brands that may not have previously engaged with these channels. This can diversify ad revenue streams and enhance the overall value proposition of Roku’s ad offerings. This is also interesting from a programmatic advertising perspective – if Roku is able to scale unique ad formats like overlays onto the TV screen, an area once dominated by programmatic and the likes of The Trade Desk may take a back seat inside Roku’s ecosystem.
A final point, and this is somewhat in my own personal interest because I own Roku stock, can the success of the ad manager be a positive indicator for investors? If Roku can demonstrate increased revenue from its ad platform and improved engagement on The Roku Channel, this might bolster investor confidence. However, just like everything, the proof is in the pudding – the actual impact on the stock price will depend on how effectively Roku executes this strategy and the market’s response to its overall growth prospects in the competitive streaming landscape. If they execute as they did with programmatic advertising, we’ll probably continue to see their stock price hover below $100 and eventually become an acquisition target. Hello, The Trade Desk? I’ve got an OS to sell you….