Roku (ROKU) announced last week that it has entered into an exclusive partnership with Amazon Ads, giving advertisers access to the largest authenticated connected TV (CTV) footprint in the U.S.
This access will come via Amazon DSP, the company’s omnichannel marketing demand-side platform.
The collaboration between the two companies is expected to deliver advertisers a logged-in reach to about 80 million CTV households in the U.S.
This represents more than 80% of the CTV households in the country, according to ComScore data.
Roku said in its announcement that the partnership with Amazon Ads will give advertisers access to an addressable CTV audience at “unprecedented scale.”
It noted that early tests of the integration have shown that advertisers “reached 40% more unique viewers with the same budget and reduced how often the same person saw an ad by nearly 30%, enabling advertisers to benefit from three times more value from their ad spend.”
The integration “utilizes a custom identity resolution service” that allows Amazon DSP to recognize logged-in viewers on Roku devices.
“This collaboration delivers a unified, future-ready solution at an unprecedented scale, one designed to drive measurable outcomes by unlocking performance across CTV,” Roku Media President Charlie Collier said in a statement.
“With nearly half of all TV streaming time in the U.S. happening on Roku, and the power and depth of Amazon in retail and beyond, together we’re uniquely positioned to prove performance and differentiate DSP offerings for our shared advertisers and marketers.”
The solution will be available to all advertisers in the U.S. using Amazon DSP in the fourth quarter of this year.
Benchmark called the partnership a “stunning announcement” that “ultimately will provide Roku with its deepest DSP integration yet.”
“Of course, Amazon DSP is not just another DSP,” Benchmark added. “This move represents their most significant pivot towards expanding their buying platform across the CTV universe, which, in addition to a Yahoo-Netflix DSP deal also announced today, shows that competition is heating up more broadly, with new entrants pressing the incumbents.”
The analyst added that the deal offers “favorable economics that scale over time,” calling it “a big step forward for both Roku and Amazon.”
Netflix's partnership with Yahoo DSP will be available in all of its 12 ad-supported countries, expanding it beyond the U.S. The service will be available later this year.
Nick Grous, an associate portfolio manager for Ark Invest, said in an email note that the partnership is “a major leap forward in data-driven TV advertising,” that is “potentially transforming the US and, longer term, the global CTV advertising market.”
Roku represents the fourth-largest holding in the Ark Innovation ETF (ARKK), with more than 5.7 million shares worth about $464.8 million.
Roku’s stock is up 8.8% YTD and has gained 48.7% over the past year.
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