Roku has seen the future of advertising, and it is interactive. Expanding on its budding ad business, the maker of streaming players and an underlying apps platform is pushing forward on a new system that will enable its channel partners to serve up 30-second ads with interactive elements that will, for example, provide interested viewers with more information about a product or a service that is being advertised.
In those ads, viewers will encounter a special overlay that, when selected, will execute the interactive experience.
Because all programs on Roku are streamed via the Internet, “that gives us some unique opportunities to do more than just a non-interactive 30-second spot,” Scott Rosenberg, vice president of advertising at Roku, said. “What we’re trying to do is build what we think is the next-generation TV ad platform.”
Innovid, a company that makes tools for interactive ads and specializes in their design, is the first partner to be integrated with Roku for that purpose. CBS, Vevo and Sony-owned Crackle are among the initial slate of Roku partners that plan to deliver interactive ads using Innovid.
While the interactive ads can be used to sell goods and services, Rosenberg noted that Innovid has also announced a new ad unit (not yet in production) that serves as a tune-in reminder — delivered to the viewer via a text message.
The upside of the whole approach with Innovid is that the updated framework will benefit all ad-supported apps on the Roku system without requiring developers to redo the apps or put them through the rigors of another quality-assurance cycle, Rosenberg said, noting that the interactive advertising capability was added in the 6.2 Roku operating system release, which was deployed about two months ago.
ROKU’S BROADER AD PLAN
Roku’s new interactive move advances the company’s larger advertising strategy, which got underway almost two years ago as it became increasingly apparent that ad-supported channels on the platform “needed investment, needed help” as the category took off, Rosenberg said.
“We felt, as a platform, that we could lean in and help those ad-supported channels monetize better,” he said.
That work has since evolved to include a Roku Ad Framework, an extension to the company’s software development kit introduced about two months ago that integrates some core technologies that help channel partners launch and support advertising more effectively.
That brings a common framework and some technical normalcy to the equation, as those partners had previously been building their own advertising systems for Roku.
A handful of partners have already launched the framework, and Roku expects the majority of its ad-supported channels to do the same over the next couple of quarters.
The company is also plowing into viewership measurement after a groundbreaking deal with Nielsen that will tie into Roku’s digital video domain. The “calibration phase” for that is getting underway this summer, Rosenberg said.
Roku declined to break down how much of its revenue now comes from advertising partnerships. It generated total revenues of about $250 million in 2014.
