Roku currently reaches 70 million active household, making it the No. 1 TV streaming platform in the U.S., Canada, and Mexico. Over a third (36%) of their subscribers are over 50, but 55% of those are cord-cutters, meaning they don’t have any access to linear TV. That’s a prime age demographic in pharma’s target audience that is now only using connected TV (CTV). What does this mean for the future of TV advertising? PM360 spoke with Eric Lloyd, Head of Industry Pharma, Health, and Wellness at Roku, to learn more about the state of streaming.
PM360: What can you share about the streaming behavior of the 50+ demographic? How actively do they engage with your platform?
Eric Lloyd: When we looked at their time streaming, it’s actually not that far off from the general population. We’re seeing that audience is really starting to mimic the same behaviors as the younger generation who were the first to adopt streaming. Not only that—now the 50+ audience is leading the growth. They are downloading more apps, spending more time streaming, and sticking with streaming versus reverting back to linear. Even those in that demo who still have linear TV only spend 44% of time watching it compared to 56% streaming.
Obviously, running ads on CTV versus linear offers marketers more data into their audience. But can you share more details about what data pharma marketers in particular can actually use to target their ads without violating any industry regulations?
Pharma is pretty restrictive overall in the types of targeting marketers can do, but brands can apply the same philosophy they do with linear TV. If they know they want to hit a certain demo, then we can pinpoint audiences by age. Or if they know some behavioral aspect that they want to target such as the types of content people want to watch, geographic location, or other hobbies and interests, then we can target based on that.
For example, for the 50+ demo, they tend to watch a lot of news or seek out content on the History Channel app, which is similar to their viewing behavior on linear TV. But one of the nice things about the addressability of streaming is that if somebody who’s in an older audience is watching a show you’d typically sell as a younger demo in linear TV, that doesn’t matter in streaming because we find the audiences versus the content. So, if a marketer is looking at age 50+, we can serve an ad to the consumer regardless of what show he or she is watching. Ultimately, our goal is to help marketers minimize waste and increase the efficiency and effectiveness of their buys to do so.
How does advertising on streaming and with Roku work? Can ads just show up across platforms or do marketers have to choose which platforms they prefer to appear on?
We have The Roku Channel, which is our own network that we have 100% ad inventory in. Then we also have the Roku Audience Network, which includes inventory within the top 100 ad-supported apps on Roku devices. In that network, we have a negotiated percentage of ad inventory on each respective app, but we don’t disclose to advertisers what apps their ads are showing up on. We just find the right audience across those 100 apps (such as Peacock, Disney+, Hulu, etc.) plus The Roku Channel.
Now, those premium apps also sell inventory on their own, so that is another option marketers can take. However, the app ecosystem lends itself to fragmentation as mini walled gardens that don’t talk to each other, so if you buy apps individually then the data infrastructure doesn’t allow you to know if you are just spending to reach the same person. In our view, that is the benefit of the Roku Audience Network, because we can stitch together everything from a holistic reach and frequency perspective to ensure you aren’t duplicating your efforts. Streamers churn through apps and content quickly, which can wreak havoc on your media plan if you start with an app-first strategy.
In terms of the advertising itself, what opportunities are unique to marketers on CTV?
Beyond the traditional :30, :60, :45, :75, and :90 spots, we found in our research with Lucid that people want to have more experiences to learn about their condition and how they can manage it better from pharma brands within streaming. So we are starting to build out programs that make sense for us. For example, we know that food does really well on our platform, so maybe we’ll build a cooking show that is heart healthy and low glycemic for diabetics, and then a pharma brand can come in and partner with us on it. Those are the things we’re trying to do that go above and beyond media spots, but it’s a whole new world for pharma brands so we are just starting to explore the marketplace for these types of programs.
Beyond wanting marketers to advertise through Roku, what would you tell marketers who are still reluctant to shift any of their budget toward streaming in general?
Basically, there’s still plenty of opportunity. Even for pharma brands who are spending on streaming, we found 92% of the people they reached on our platform were incremental to their TV buy, so they did not see their ad on linear TV at all. That’s a hefty amount.
When you look at linear, the top nine networks are only reaching 1% to 2% incremental audience, so the other 98% to 99% were the same people seeing the same ads on multiple channels over and over again. Because of how high that duplication is, even if marketers move money out of linear they are not likely to lose their ultimate cumulative reach across those networks.
In another study, we found cord-cutters have 35% less awareness about pharma brands compared to linear TV viewers—that is a massive awareness gap marketers can’t close unless they right size their investment to reach this audience. Even Google recently released a CTV research study that says 40% of all households in the U.S. are not reachable through linear television. That alone should make marketers open their eyes and consider adding streaming to their marketing mix. The bottom line is you are going to need to have a specific CTV strategy because it’s the biggest screen in the house, with largest level of engagement, and now has a mass reach to rival linear television.
