Streaming Ads To See Roku’s Value “Double Or Even Triple”: Analyst

Los Gatos, California, USA - March 29, 2018: Netflix and Roku signs at headquarters in Los Gatos, California.

With the proliferation of streaming services set to boost the popularity of connected TV, one analyst has tipped an “invisible company” to be one of the main benefactors.

Roku is best-known for selling various pieces of hardware that allow TV viewers to connect to the internet.

But now the company has moved beyond hardware and into software, launching a series of white-label smart TV products, including tools to help measure the reach and effectiveness of ads on streaming platforms.

And according to editor of the RiskHedge Report Stephen McBride, this pivot – and the subsequent increase in ad revenue for the company – could see Roku’s value explode.

“The TV advertising industry is now worth over $US70 billion. While one out of every three hours of TV viewing happens via streaming services, streaming advertising still makes up a meager 3 per cent of TV ad budgets, according to Nasdaq. That’s just $US2.1 billion out of $US70 billion,” he said.

“As streaming continues to phase out cable TV, I expect streaming ads to steal a bigger and bigger piece of the $US70 billion pie from TV ads.

“For those reasons, I wouldn’t be surprised if Roku’s advertising revenues grew tenfold in the next five years—handing investors triple-digit gains.”

Additionally, Roku’s recent acquisition of programmatic marketing software platform dataxu will give the company increased access to data-driven solutions to be used to plan and buy ads across Roku’s platform.

 




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