Roku is looking for media companies to help make its connected TV platform a part of the distribution mix for advertisers’ branded video campaigns.
Over the past two months, Roku has been pitching media companies, including TV networks and digital publishers, and agencies on promoting advertiser videos as ads on the connected TV platform’s home screen, according to three people who have been briefed on the matter. Under the arrangement that Roku has presented, an advertiser would pay for the placement on Roku’s home screen, and the media company and Roku would split the revenue, with the media company receiving 55% of the revenue and Roku taking the remaining 45%.
One media exec, who has been briefed on Roku’s pitch but has not signed a deal with the company, described the program as “a proof-of-concept” that Roku is looking to roll out in the fourth quarter of 2019 or first quarter of 2020. However, the pitch resembles the branded content program that Roku introduced last year and could be the company building on that existing program by opening it up to more media companies and advertisers.
In September 2018, Roku added a MillerCoors section within its free, ad-supported streaming service Roku Channel. The MillerCoors section carried minutes-long videos that Great Big Story and National Geographic had produced documenting people exploring glaciers, the ocean and other outdoor locales. As part of the program, Roku ran ads on its platform’s home screen to point audiences to the branded content.
In its recent pitch to media companies, Roku is positioning itself as an additional distribution outlet for advertisers’ videos. Unlike Facebook which provides self-serve tools for media companies to promote branded content on the social network, a media company would need to provide Roku with an insertion order that includes the campaign’s assets and impression goals.
Media execs see Roku’s pitch as a way for the platform to cozy up with media companies while also piggybacking media companies’ work with advertisers. In particular Roku is highlighting the ad placement that appears on the right side of its home screen next to the menu of streaming apps. “They’re getting like billions of impressions on that unit. It’s ever-present,” said a media exec. A Roku spokesperson declined to comment on the terms of its branded content program.
However, advertisers may need to be convinced of the value of those impressions. One agency exec who has received Roku’s branded content pitch within the past two months questioned the likelihood that someone would elect to watch a piece of branded content when browsing Roku’s home screen. “I give them credit in trying to think differently of how to use the platform that they have, but similar to the Roku Channel, I don’t feel like it’s that compelling a place to go to,” said the exec.
Another agency exec was more open to the potential. This exec had previously worked on a campaign for food marketer to distribute branded content on Microsoft’s Xbox. “It was amazing the amount of time that kids would spend on that content. It’s a precursor to what we’re talking about now,” said this exec.
The model to the approach taken by Snapchat, which in March 2018, enabled Discover publishers to run the branded content they produce for companies as ads in their Discover channels.
“At launch it was more compelling to have Snapchat Discover be an additional distribution point for a much bigger project you might be doing with a publisher, and I think for Roku this is similar,” said the first agency exec.