So Long, Agencies: Why Brands Are Shifting CTV Advertising In-House
by Stephen Graveman
3 Min Read
The streaming giant’s latest earning report signals what’s to come in the programmatic TV space.
3 Min Read
Want another reason to make a shift to Connected TV advertising? If you don’t act now, you may get left behind. Roku announced a record fourth quarter and outperformed Wall Street’s predictions, with a 58% increase in revenue and a $65.2MM net profit. They’ve also reported a 39% YoY increase in subscribers – and more than doubled its audience on their ad-supported Roku Channel, closing at a sweet 61.8MM viewers in the last quarter.
Scott Rosenberg, SVP / GM Platform Business, explained that there is still a long way to go for Connected TV ad buys to match viewership levels, “2020 was a transformational year for TV marketers who understand that viewership is leaving linear TV and not coming back. We’re certainly seeing that start to show up in the TV upfront commitments that advertisers made – they’re generally down and more flexible and many advertisers have the opportunity to reallocate budgets to OTT. But we still have a ways to go in terms of the dollars matching consumer time – we’re nowhere near seeing half of TV money being invested in streaming yet.”
Roku’s subscriber base and ad impressions weren’t the only things that were on the rise – monetized video advertising impressions more than doubled year-over-year. What this tells us is that Connected TV advertising, or programmatic TV, is a ripe opportunity for many brands. Roku’s CEO, Anthony Wood, explained that the behavior of TV ad buyers who traditionally buy linear TV is the “biggest short-term obstacle for [their] ad business.” We’ve followed this pattern over the past year and commented on the 33% dip in Upfront media buys – a sign of what’s to come this year, as more advertisers realize Connected TV advertising’s long term potential as viewers move away from Linear to Connected TV.
72% of households with wireless internet also stream video on their Connected TV screens, but we are still seeing many media buyers continue to apply a ‘Linear TV’ approach to their Connected TV advertising – that is, buying ad inventory based on network instead of an audience-first approach, and viewing CTV advertising as a branding tool only. There’s a smarter way to go about it, and that’s through programmatic real-time bidding. CTV ad platforms like MNTN marry IP-addresses layered with in-market and consumer data, matching these audiences to premium TV networks for precision targeting. There’s also the added benefit of reaching audiences in walled gardens all through one platform without having to divvy up budgets across different publishers. Either way you look at it, the linear TV approach is outdated as it lacks the ability to tie campaigns back to goals or KPIs and measure them. It’s only a matter of time when CTV advertising will be the norm – and who knows what Roku’s next earnings report will look like?