Roku Inc ROKU announced the addition of Activation Insights to its array of over-the-top advertising tools, the Ad Insights Suite.
The move could “serve as a catalyst” for the company’s advertising sales and boosts the near-term and long-term outlook, according to D.A. Davidson.
The advertising solution provides data analysis on consumers, enabling advertisers to maximize returns on investment from advertising on Roku’s platform, Forte said in a Thursday note. (See his track record here.)
Activation Insights gives Roku the opportunity to benefit from the shift in television advertising spend — estimated at $70 billion — toward over-the-top and away from linear television, the analyst said.
Video advertising trends may be similar to what was witnessed with mobile advertising, where advertising spend followed an increase in usage, Forte said, adding that he expects Roku to follow the usage trends.
In the first quarter, consumers watched 8.9 billion hours of video content on Roku’s platform, which represents 74.5-percent growth, the analyst said.
Roku cited Magna Global data that indicates over-the-top comprises 29 percent of viewing but only 3 percent of advertising budgets, according to D.A. Davidson.
Activation Insights tracks advertising reach and efficiency on both OTT and linear TV, including the company’s 29.1 million active accounts as of the first quarter, Forte said. This enables advertisers to “maximize incremental audience reach, which we consider to be quite valuable," he said.
Roku shares were down 0.25 percent at $87.80 at the time of publication Thursday.
Photo courtesy of Roku.
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