• by Wayne Friedman , March 5, 2025

Heavy cost-per-thousand viewer discounting and stronger new demand-side platform partnerships will help Roku see advertising growth of 23% this year -- twice as rapid as growth in 2024, according to MoffettNathanson Research.

The big streaming platform distributor is projected to hit $3.02 billion in advertising revenue in 2025, with slower mid-teens gains the following year -- to $3.5 billion.

Michael Nathanson, media analyst and co-founder of of MoffettNathanson Research, says the pricing cut in CPMs (the cost-per-thousand viewers) -- below $10 in some cases to help it fill ad inventory availabilities -- is working for now.

In a note he writes: “Roku’s pricing approach is taking advantage of the strong surge of ad dollars into CTV, in part due to the decline of linear TV.” Premium streaming inventory on major platforms is averaging around $20-25 CPMs.

Core CTV/AVOD advertising -- sans political advertising -- was up 32% to $14.4 billion in 2024, with linear TV shrinking 3% to $59.7 billion.

In addition, Roku has expanded the list of DSPs it works with -- with major DSPs like The Trade Desk, Comcast’s FreeWheel, Google’s Display & Video (DV360) among a group of around 30 other companies.

Advertising is part of Roku’s "Platform" business. The other part -- subscription revenue from subscriber fees/revenue share with app/platforms -- is growing more slowly, projected to rise around 10% in 2025 and again in 2026.

Total platform revenue is estimated to grow 19% to $4.2 billion this year and 13% next year to $4.7 billion.

But there are concerns, especially from new competitors -- with Walmart's recent purchase of TV set marker Vizio and demand-side platform The Trade Desk and its new streaming operating system (OS), Ventura -- in addition to existing competitors Amazon, Google, Apple, and Samsung.

In the company’s favor is that Roku OS remains the best-selling TV OS in the U.S. And at end of 2024, Roku reached 89.8 million streaming households globally through all its devices.