One of the biggest challenges to emerge from the ongoing shift from traditional television viewing to streaming is the changing paradigm for advertisers. Once upon a time, it was easy for marketers to reach their desired audiences, but the shift to streaming and the proliferation of viewing options has made it more difficult than ever for advertisers to reach their target markets.
Now, streaming platform Roku (ROKU +2.26%) and programmatic advertising leader The Trade Desk (TTD 2.15%) are joining forces to help bridge the gap.
Image source: Getty Images.
Two digital advertising dynamos
In a press release that dropped on Tuesday, The Trade Desk and Roku announced "a new data-driven TV streaming partnership" to help advertisers plan more effective ad campaigns for streaming viewers. The goal of the partnership is "to leverage Roku Media and audience and behavioral data so that The Trade Desk customers can better understand and optimize their campaigns for TV streaming viewers."
Roku is the top streaming platform in the U.S., with more than 81.6 million households in its fold. Furthermore, the Roku smart TV operating system (OS) is the No. 1 selling TV OS in the U.S. and Mexico and was in roughly 40% of all TVs sold in the first quarter. The company has also been selling its own Roku-branded connected TVs (CTV), further expanding its reach.
"CTV has emerged as one of the most powerful digital advertising channels on the open internet," said Jed Dederick, The Trade Desk's chief revenue officer. "This new partnership with Roku will enable The Trade Desk's clients to put valuable new data insights to work and fully optimize their [advertising] campaigns," he said.
"Matching Roku's reach with the power of The Trade Desk's innovative solutions will unlock new ways for marketers to reach the right TV streaming audiences strategically," said Jay Askinasi, Roku's global media chief.
Not only will the partnership result in more effective advertising for The Trade Desk users, but it will also result in more advertising opportunities for Roku, which makes the lion's share of its revenue from the digital advertising shown on its platform. Underpinning this collaboration is Roku's vast database of audience and behavioral information, known as automatic content recognition (ACR) data.
ACR: A primer
Roku is something of a pioneer in ACR. In fact, the company won a Technology and Engineering Emmy last year for its work in the field.
When a user sets up their Roku account, they can opt-in to have their viewing preferences collected. Once they do, Roku keeps track of the shows they watch on its platform across traditional broadcast, cable, and streaming channels in order to make more accurate recommendations. Additionally, the company maintains a catalog of advertising so it knows what ads viewers have seen and if they were engaged or if the ad caused them to change the channel.
As a result of this technology, Roku has a treasure trove of information regarding viewer preferences and can provide detailed data to help marketers make better-informed decisions about their target market. This also helps provide audiences with ads they might actually care about.
As the world's largest independent advertising technology leader, The Trade Desk already helps marketers make data-driven decisions about the ads they run -- particularly in the area of connected TV, which is the company's fastest-growing segment. By joining forces with Roku, The Trade Desk can provide advertisers that use its platform with even more granular data, which will help them deliver better, more effective advertising.
Is the deal a game changer?
The Trade Desk's ad tech platform helps the world's largest ad agencies and their customers design better marketing campaigns to reach their desired audiences. Adding in Roku's first-party viewer data will significantly increase the potential for success for advertisers. Roku has unmatched reach, which will help The Trade Desk's advertisers enjoy "meaningful outcomes through scale, premium inventory, and optimization capabilities that will help efficiently maximize ad spend."
Roku signaled that it would be ramping up partnerships such as this one. During the company's first-quarter earnings call, CEO Anthony Wood said Roku was "expanding and deepening our relationships with third-party platforms." This is a clear example of that strategy at work.
The deal seems like a win-win. The Trade Desk's customers will have better data to make advertising decisions, and Roku will likely benefit from a greater number of advertising opportunities on its platform. It could also eventually rise to the level of game changer, but only time will tell.
