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Roku Acquires Nielsen Holdings' Next-Generation Ad Unit

By Eric Volkman - Updated Apr 18, 2021 at 12:52AM

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The two companies will also be teaming up in a strategic alliance centered around content and ad measurement technology.

Roku (ROKU -6.58%) is now officially one asset larger, as the company has closed a deal for the Advanced Video Advertising (AVA) division of viewership tracking specialist Nielsen Holdings (NLSN 21.18%). The price of the acquisition, which was originally announced at the start of last month, was not disclosed.

By owning the AVA business, Roku is gaining assets that include automatic content recognition and dynamic ad insertion (DAI). The latter in particular can help it offer cutting-edge ad services, presumably at higher rates than more traditional offerings.

A family on a couch, watching TV.

Image source: Getty Images.

In addition to the AVA deal, Roku and Nielsen have formed what they term a "strategic alliance." This will see Nielsen insert its advertising and content measurement technology into Roku's software platform. The two companies say this will be complementary for Roku.

"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," the company's vice president of product management Louqman Parampath was quoted as saying.

"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," he added.

The Nielsen arrangements constitute an aggressive move for Roku, which if successful will help push it ahead in the streaming video ad space. The company has established itself as a top go-to neutral streaming video platform, so it is in a good position to take advantage of the next-generation Nielsen ad solutions now in its portfolio.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Roku. The Motley Fool has a disclosure policy.

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