Roku is looking to launch a new video-based advertising product that will promote the movies and TV shows on its platform.
The video tech company is currently on Madison Avenue pitching “Roku Recommends,” according to Digiday, which talked to ad agencies who have taken meetings with Roku.
The new promotional product would roll out in the second or third quarter of this year, the site said. Advertisers, who appear to be the major SVOD and AVOD players, would pay “low- to mid-six figures” to have their content positioned in the asset. The videos would run five to seven minutes and be presented by the sponsor.
Roku, which hasn’t yet publicly commented on the Roku Recommends, could also use the asset to promote the emerging original shows on its own ad-supported Roku Channel.
To an extent, Roku Recommends sounds like an expansion of a more static sponsored UI component that the company has already monetized. In fact, in its fourth-quarter letter to shareholders, Roku highlighted the sponsored feature, which sits on the right side of the screen, adjacent to the user’s downloaded channels, and is designed to take users to a specific show or event. In the letter, Roku specifically spotlighted a link to the live coverage of February’s Super Bowl, with Turbo Tax being the sponsor.
Roku also highlighted a Comcast/NBCUniversal campaign that it said helped drive high levels of viewership of The Office on Peacock when the show transitioned from Netflix in early January.
“Our biggest content partners now typically buy promotions from us on a cost-per-action (CPA) basis, and optimize on metrics like installs, subscriptions, views and retention,” Roku said in the shareholders letter. “Machine-driven content marketing benefits not only our content partners, who benefit from more efficient advertising, but also our users who see more relevant ads.”
Roku generated $1.268 billion in “platform revenue” in 2020, a 71% increase in the amount of sales it generates mainly on advertising on the Roku platform.
