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Are you tired of having to watch the same three or four ads over and over again? That could change soon, if Roku has its way. The smart TV and streaming device maker is working on dramatically expanding the number of advertisers vying for your attention, to the point where ads on streaming could soon look a lot more like those on your Instagram feed, complete with brands you’ve never heard of and videos that don’t quite look real.
Roku’s secret weapon for this is generative AI, according to Roku CFO and COO Dan Jedda, who laid out Roku’s plans for this during two appearances at investor conferences hosted by Citi and Bank of America this month.
“No longer is it going to be about the top 200 advertisers,” Jedda told investors during Citi’s event. “It’s going to be about 100,000 advertisers.”
If you want to know where TV is going, it’s a good idea to closely watch Roku. It’s a public company with a singular focus on smart TVs and streaming, which forces it to be a lot more transparent about its numbers than, say, Amazon or Google.
Roku also happens to be the market leader, at least in the US, and it’s not beyond bragging about its success. Jedda, for instance, was quick to point out that over 20 percent of all TV viewing in the US now happens on Roku devices, with Roku TVs and streaming devices now in over half of all US broadband households. “We will surpass 100 million streaming households in the not-too-distant future,” he said.
Roku’s own streaming service has been growing significantly as well: Streaming hours of the Roku Channel have increased 80 percent year over year, according to Jedda, who told investors that he expects growth of the channel to be in the 55–60 percent range in the future. The Roku Channel accounted for 2.8 percent of all TV viewing in July, according to Nielsen, putting it ahead of major streaming services like Peacock and HBO Max.
That surge in streaming hours has led to Roku having a ton of video hours to run ads against, with Jedda admitting that the company hasn’t been able to sell ads as quickly as it scales up viewing. “We’re growing very fast on supply,” he told investors last week. “We’re roughly half sold out.”
Roku’s plan to sell that other half, or at least a good chunk of it, involves bringing a lot of smaller and local advertisers to streaming. Think car dealerships, mom-and-pop shops, and the like — the kinds of companies commonly known in the industry as small and medium-sized businesses, or SMBs.
“The SMB market has been really shut out of all [connected TV],” Jedda told investors last week. Your local car dealership, or the restaurant next door, is still spending most of its digital marketing budget on search and social media ads. If Roku has its way, a good chunk of that is going to shift to streaming.
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