Roku Morphing Into Ad Company As Popularity Climbs

While its name remains synonymous with little digital media devices, Roku is increasingly becoming an advertising company.  

That’s the big takeaway from the company’s third-quarter earnings report, which revealed revenue growth of 74%, year-over-year.

For the first time, the over-the-top content specialist took in more than $100 million in advertising and services revenue during the quarter, which ended September 30.

In the area of advertising, Roku attributes its success to a direct relationship with customers on its platform, which allows for the continuous collection of various data, including user registration, and anonymized behavioral information.

Roku gathers this data and creates user segments, develops look-a-like audiences and predictive models, and activates segments for use in various business operations, including recommendations for users in The Roku Channel.

Hardware revenue growth slowed by about 9%, during the period.



Despite competition from Apple, Google and other heavyweights, Roku’s popularity continues to climb. Year-over-year, active accounts were up 43% to 23.8 million, while total streaming hours were up 63% to 6.2 billion.

Average revenue per user was up 37% to $17.34, year-over-year.

This past quarter, Roku also announced the Measurement Partner Program to help brands and publishers quantify the impact of ad campaigns running on the Roku platform across a variety of marketing and sales outcomes.

Eleven partners, including Nielsen, comScore, ResearchNow, Nielsen Catalina Solutions, Acxiom, Experian, Oracle Data Cloud, Kantar, Placed, Factual and Polk, are part of the program.

Each measures a specific part of the marketing funnel, including audience demographics, brand awareness, store visits, website visits and sales increases.

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