Roku Plans to Expand AI-Generated Ads on Your Screen
▼ Summary
– Roku plans to expand streaming ads to include 100,000 advertisers, making them resemble social media feeds with diverse and unfamiliar brands.
– The company is leveraging generative AI to help small and medium businesses create TV ads quickly and easily, addressing their lack of production resources.
– Roku is a dominant player in the US streaming market, present in over half of broadband households and accounting for over 20% of TV viewing.
– The Roku Channel has seen significant growth, with streaming hours up 80% year over year, but ad inventory remains roughly half unsold.
– Roku aims to attract local and small advertisers through self-serve tools and dedicated sales efforts, shifting their budgets from search and social media to streaming.
If you’ve ever felt like your streaming experience features the same handful of ads on repeat, get ready for a major shift. Roku is preparing to transform the advertising landscape on its platform, moving beyond major brands to include tens of thousands of smaller and local businesses. This expansion aims to make streaming ads feel more personalized and diverse, almost like scrolling through a social media feed.
During recent investor conferences hosted by Citi and Bank of America, Roku’s CFO and COO Dan Jedda outlined the company’s ambitious vision. He emphasized that advertising will no longer be dominated by just the top 200 advertisers. Instead, Roku plans to open the door to as many as 100,000 advertisers, dramatically broadening the pool of brands vying for viewer attention.
As a publicly traded company focused exclusively on streaming and smart TVs, Roku offers a clear window into the future of television. Its influence is substantial, with over 20 percent of all TV viewing in the US occurring on Roku devices. More than half of all broadband households in the country own either a Roku TV or streaming device, and the company expects to surpass 100 million streaming households in the near future.
The Roku Channel itself has seen remarkable growth, with streaming hours increasing by 80 percent year over year. According to Nielsen, it accounted for 2.8 percent of all TV viewing in July, outperforming established services like Peacock and HBO Max. This surge in viewership has created a significant inventory of ad space, so much so that Jedda admitted the company is only about half sold out on available ad slots.
To fill that gap, Roku is turning its attention to small and medium-sized businesses (SMBs), local car dealerships, neighborhood restaurants, and independent retailers that have traditionally been excluded from connected TV advertising. These businesses still allocate the bulk of their digital marketing budgets to search and social media, but Roku aims to redirect a portion of that spending toward streaming.
A key obstacle for many smaller advertisers has been the cost and complexity of producing a television commercial. That’s where generative AI enters the picture. Roku is integrating AI tools into its self-serve ad platform, allowing businesses to create professional-quality commercials in minutes. As Jedda explained, this technology enables even the smallest advertisers to get up and running almost instantly.
Roku isn’t alone in pursuing this opportunity. Digital advertising firm Magnite recently acquired Streamr, a startup that uses generative AI to help businesses produce TV ads. Competition in this emerging space is expected to intensify, though Jedda believes no single company can effectively reach all SMBs alone. Roku plans to invest in targeted marketing campaigns and dedicated sales teams to attract local advertisers.
The result for viewers will be a noticeable increase in the volume and variety of ads, many of which will be AI-generated. Streaming ads may soon resemble the dynamic, ever-changing content found on social platforms, bringing both new brands and novel creative approaches to the big screen.
(Source: The Verge)
