Roku Ad Biz Skyrockets; Pandora Makes A Programmatic Promise

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OTT Hypergrowth

Roku’s ad business is growing fast, representing about three-quarters of its total platform revenue in 2017. In its Q4 earnings, the company said 2017 platform revenue grew 115% to $225 million, meaning Roku made roughly $168 million in ad revenue last year. Roku predicts that the $70 billion spent on linear TV budgets will keep trickling into streaming TV. Read Roku’s letter to shareholders. As further evidence of OTT’s expanding influence, Dish’s virtual MVPD Sling TV grew ad sales revenue “tenfold” last year, Dish CEO Erik Carlson said Wednesday during the company’s Q4 earnings. As programming costs continue to rise, Sling TV remains focused on margin expansion in areas it has more control over – like ads. In addition, Sling TV grew subscribers by 47% YoY to 2.2 million paid subscribers. This quarter marked the first time the satellite operator broke out Sling TV’s total subscriber count.  

Game Plan

Pandora reported earnings Wednesday, a day after launching its programmatic audio marketplace [AdExchanger coverage]. Revenues were up in Q4 by 7% to $395 million and for the full year by 6% to $1.5 billion. Pandora didn’t break out ad revenue, but said it fell for the year due to a decline in active listeners. The largest music streaming platform in the US has been slow to build products that satisfy both its consumers and its advertisers, but new CEO Roger Lynch is bullish. Pandora will reinvest $45 million in savings realized in 2017 into building programmatic solutions, including a self-serve platform for SMBs, as well as automating direct sales and becoming a leading player in the podcast space. “[We’re] creating the technologies to connect our data with new product capabilities and mar tech tools that allow us to do personalized outreach at scale,” Lynch said. Read the release.  

Vox (Less) Populi

Vox laid off 50 employees and changed 12 roles – moves aimed primarily at its social video team. With Facebook’s decision to deprioritize news content in the news feed, its video production no longer has “viable audience or revenue growth drivers,” wrote Vox CEO Jim Bankoff in a note to employees. Vox is one among many digital media torchbearers – including Refinery29, BuzzFeed and CNN – downsizing to compensate for a decline in Facebook referral traffic and other capricious social trends. According to Bankoff, the decision to scale back on Facebook is the company’s way of “being proactive and disciplined about our long term budgets.” WSJ has more.

My Gift To You

A few undisclosed publishers have been working with Amazon to embed commerce-focused articles in Amazon’s site and app, reports Digiday. Amazon can offer scale and exposure, but it comes with deep trade-offs for publishers. For one thing, the only revenue is when content served on Amazon drives sales to featured products, and the payout is the same as the affiliate program Amazon runs on publisher sites. It’s a good way for less-established media companies to reach eyeballs, but the data returned to publishers is fruitless – while Amazon is presumably extracting valuable insights for its own product recommendation services. More.

What’s Your Strategy?

Mediapalooza 2018 is in full swing. But unlike the last big round of pitches in 2015, brands this year are looking for agencies with the strongest data and technology chops rather than the lowest price. As brands get their data houses in order and take control of their media budgets, they’re looking to media agencies as strategic partners rather than commodity service providers. Part of that shift is sparked by marketers taking elements of media buying in-house, creating an existential threat to agencies that are more executional than strategic. “I’ve worked with clients that will spend millions on search alone, so rather than outsource it, they can bring in a powerful team,” Ken Robinson, owner and partner at Ark Advisors, told Adweek. “That’s what’s killing [the agencies].” More.

But Wait, There’s More!

You’re Hired!

This post was syndicated from Ad Exchanger.