Roku will soon add video-based ads to its operating system home screen, and is also looking into the use of other kinds of video-based ad formats elsewhere, it has revealed.
Roku is well known for its high quality yet low cost TVs and streaming devices, and the reason it is able to do that is becoming clearer by the day, for its ultimate end game is to transform buyers into the product.
The company’s long-term strategy involves monetizing the time people spend watching their TVs, and it has slowly stepped up its use of advertising in the last couple of years to enable that plan.
"On the home screen today, there's the premier video app we call the marquee ad and that ad traditionally has been a static ad,” said Roku CEO Anthony Wood during an earnings call with analysts this week. “We're going to add video to that ad. So that'll be the first video ad that we add to the home screen. That will be a big change for us.”
The video-based home screen ads join the new interactive and shoppable ad formats that will also appear on Roku’s home screen in the coming weeks or months, the company confirmed.
During the conference call, Wood said Roku also continues to experiment with other kinds of video-based ads.
To monetize its user base, Roku intends to increase the number of ads it shows them, but it’s trying to do so in a way that doesn’t upset its customers too much. To compensate, it is also innovating in an effort to enhance the user experience, with AI-powered content recommendations and similar features that streamline its platform. But some customers consider these recommendations to be a form of advertising by content partners, and may not appreciate them all that much.
Still, we can’t blame Roku for pursuing such a strategy given the potential profits it can drive, and its plans are in-line with an industry-wide trend. For instance, both Google TV and Fire TV have also introduced video ads to their platforms recently, including their home screens. Meanwhile, LG Electronics and Samsung Electronics are also looking to monetize their respective webOS and Tizen platforms, even while charging high prices for their premium TV models.
At present, the only major TV platform provider that isn’t going all-in on ads is Apple, whose Apple TV 4K streaming box does not (yet) display ads on the home screen.
