Roku has agreed to acquire Nielsen's advanced video advertising business and the two companies will work together on standardizing audience measurement including the growing number of viewers who are streaming programming.
The deal will give Roku technology to enable the same dynamic ad insertion and addressable advertising via traditional linear broadcast and cable TV networks as it already offers on its streaming platform.
Nielsen has been testing its DAI system with a number of programmers including AMC Networks, CBS, Discovery, NBCUniversal and WarnerMedia.
"We're excited to work alongside our publishing partners and bring the same benefits to linear by enabling real-time replacement of traditional ads with targeted ads," said Alison Levin, Roku's VP of Ad Sales & Strategy.
"We want to focus to help brands right size media spending and one of the barriers historically has been real-time, four-screen measurement for reach and frequency," Levin said. "So this announcement is a win-win for both sides, but also a win for publishers and a win for brands as well."
The agreement also provides more data for Nielsen as it focuses on counting viewers on a consistent basis across platforms, screens and devices.
Financial terms were not disclosed.
As part of the deal, Roku will get Nielsen's video automatic content recognition (ACR) and dynamic ad insertion (DAI) technologies.
Roku will integrate Nielsen ad and content measurement products into the Roku platform and further advance Nielsen One, Nielsen's new cross-media measurement scheme.
As more consumers have shifted their viewing to streaming, Roku has been a big beneficiary both in terms of adding users and generating advertising revenue.
“Tens of billions of dollars continue to be spent annually on traditional TV advertising. Combining Nielsen’s AVA technology with Roku’s innovative ad tech and scale will enable us to deliver the benefits of TV streaming advertising to traditional TV," said Louqman Parampath, VP of Product Management at Roku.
“Roku will bring the promise of DAI to the market for the first time ever at scale — providing better targeting and measurement for advertisers, creating easy integration and additional revenue opportunities for programmers’ ad sales teams, and improving the TV experience for viewers,” Parampath said.
Parampath said Roku believes the Nielsen insertion technology is fairly ready, and that Roku will be able to provide the large scale required.
“We’re also excited to become a key strategic partner for Nielsen in their new cross-media measurement products, and jointly drive toward greater transparency and accuracy in TV streaming measurement," he added.
Roku said it was looks forward to adding some Nielsen’s staffers and taking ownership of a portfolio of ACR and DAI patents,
Nielsen and Roku said they would be signing a long-term agreement to add Nielsen’s Total Ad Ratings on the Roku platform. Nielsen’s Digital Ad Ratings will be natively integrated into Roku’s One View ad buying platform. Roku will also enable publishers to utilize Nielsen Digital Content Ratings.
Roku has been using Nielsen's Digital Ad Ratings since 2015.
“The measurement of ads and content on Roku devices will accelerate the path to a single, deduplicated cross-media currency,” Scott N. Brown, GM, Audience Measurement, Nielsen. “As Roku brings the power of dynamic ad insertion to all forms of TV, we’re excited to help monetize the addressable market by measuring smart TV as a currency, which Nielsen can do at scale.”
Roku bought ad tech company Dataxu in 2019 and used it as the basis for its OneView, a self-serve programmatic platform that offers buyers data management, media planning and attribution tools to evaluate their video ad activity. Roku unveiled OneView in May 2020.
Last month, Roku reported an 81% increase in platform revenues, including ad sales, for the fourth quarter.
Nielsen in November agreed to sell its problematic Global Connect business for $2.7 billion to Advent International as part of a strategy to focus on a more unified system of measurement that treats all platforms the same and helps advertisers measure the reach and impact of their advertising.
Nielsen said it would be using big data from set top boxes, smart TVs and other sources on top of its traditional viewers panels to measure audiences.
Nielsen launched Nielsen One in December, saying it will shift itsfocus from average minute per program to evaluating viewing on a second by second basis and move from a unit-based ad model to an impression based system that gives a separate audience number to individual commercials.
The transformation isn’t expected to be fully completed until fall 2024.
Nielsen reported a $35 million profit for the fourth quarter.
