Roku has introduced a new advertising optimization platform that uses machine learning to help marketers target specific consumer actions and expand household reach across its streaming television ecosystem.
The platform, called Roku Outcomes, allows advertisers to optimize campaigns around measurable results, including app installations, subscriptions, free trials and other conversions, rather than relying solely on audience impressions.
Roku Outcomes includes two products: Amplify, which focuses on reaching new households while managing advertising frequency, and Actions, which optimizes campaigns toward specific consumer activities at a target cost per acquisition established by the advertiser.
The technology uses data collected across Roku’s streaming platform to connect advertising exposure with subsequent activity, including app downloads and initial viewing sessions. Those signals are used by machine learning systems to adjust advertising bids and campaign delivery while campaigns are running.
“Performance marketers want to know: Did it drive action and at what cost?” James Kelm, Vice President of Products, Advertising and Media at Roku, questioned in a press release on Wednesday.
Kelm said the platform allows media and entertainment advertisers to establish acquisition cost targets while measuring subsequent consumer activity within Roku’s operating system.
During a test run two months ago, all nine paid external advertising campaigns achieved acquisition costs at or below their targets, Roku said. The median cost per acquisition was 38 percent below advertisers’ targets, according to results measured through October 30. Seven campaigns had concluded at that point, while two remained active. Roku’s own advertising campaigns were excluded from the figures.
Streaming television providers Philo and QVC Group are among the companies using the tools to improve campaign performance and reach new audiences, Roku noted. The platform supports advertising across Roku’s Home Screen and in-stream video inventory.
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Roku Outcomes Actions is initially available to media and entertainment advertisers, with support for purchases, website visits and shopping cart activity planned for a future expansion.
Advertising is a major driver of revenue for Roku: The announcement of the new AI-based ad optimization tools came less than a week after Roku reported $1.5 billion in overall revenue during its most-recent financial quarter, almost all of which — $1.3 billion — was based on advertising and subscription sales.
Across Roku’s platform business, the company earned $459.4 million in profit on $727.4 million in advertising revenue alone. Platform gross profit climbed to $697.1 million as buyers rushed to take advantage of Roku’s advertising inventory and connected TV sales solutions across its fleet of more than 100 million in-use devices.
Roku is in the process of being acquired by Fox Corporation.
