5 Minutes with Roku’s Kristina Shepard

Roku holds a strong place within the changing TV environment. Its platform is the gateway for 83 million active accounts to watch various streaming platforms, while also being a leading entertainment provider itself with The Roku Channel, its free ad-supported streaming television platform. The Roku Channel, already one of the most popular streaming services in terms of usage, recently branched into broadcasting major professional live sports after partnering with the MLB.

That scale and optionality is providing a tremendous space for Roku to open up for more advertisers. Kristina Shepard, Roku’s VP of global advertising sales and partnerships, sat down with The Current Editor-in-Chief Stephanie Paterik to talk about expanding Roku’s advertising operations, why she thinks all TV in the future will be streamed and the TV experience that Gen Z expects to have.

What’s your “big swing,” or big ambitious project, that you or your team are working on right now?

I would say, for Roku right now, the two biggest priorities are both being interoperable as well as innovating the home screen. We’re very excited about being excellent in programmatic and allowing customers to purchase from us however they want.

What’s the benefit of opening up and connecting with partners?

Roku is the No. 1 streaming platform. We have half the broadband households [in the U.S.] and something we want to make sure we can do as the largest, most-scaled platform is empower streaming as an entire channel to be one of the most strategic channels that there is for marketers.

And in order to do that, we need to break down walled gardens and be able to share the data so that brands can see how performant streaming can be. I think our vision has always been that all TV will be streamed and therefore all TV ads will be streamed. And with that in mind, we know that it has to perform.

We believe that [advertising on] streaming can be the best of TV, the best of digital, the best of social altogether in one. It has the beauty of television, it’s on the largest screen, but also has the digital infrastructure here to enable all of the targeting, measurement, [and] interactivity that brands and consumers want and expect.

You mentioned innovation on the home screen, and I would love to go in deeper on that. What is the biggest innovation that you see coming that’s going to change your business?

Being the platform [and] owning the streamer’s entire journey is a unique competitive advantage for Roku. The platform controls the experience, from power on to off, and it’s the first thing that any viewer sees when they turn on their TV. And so, what we want to make sure of is that we can now immerse marketers within the streamer’s journey to follow them wherever they might be.

And that’s both a benefit to the advertiser but also a benefit to the consumer. There are very different viewing patterns on streaming than there are on linear, which is awesome and fun. And we have created ad units from the genesis of our platform that enable a more unique ad experience. We want to continue to innovate there and have more non-endemic, big Fortune 500 brands have access to the home screen in a more unique way.

About a year ago we rolled out Roku City. From an advertiser perspective, Roku City is one of the largest digital downtowns and it is a world in and of itself. It’s really fun for consumers because it’s built out. It has the purple hue that they know and love about Roku. It has little entertainment Easter eggs, and people actually watch it.

About 85% of Roku viewers sit and watch Roku City as if it’s content. About a year ago, we released it as an ad product and are selling real estate, as we like to say, within Roku City. And McDonald’s was the first brand to take advantage.

Since then, we’ve seen brands from all categories take advantage. Paramount built out what we call a Roku City neighborhood, brought all of their IP [intellectual property] in. And so Yellowstone and SpongeBob and Nickelodeon had this really fun, whimsical experience that the viewer could enjoy.

We see that different generations now expect different things from TV. About 40% of Gen Z actually expects to engage and interact with their TV screens, which is a much different user behavior than ever existed before.

Having this immersive kind of component to the streaming journey has been really well received. It’s a great opportunity for brands to have a two-way conversation.

Let’s talk challenges and opportunities. What is the biggest challenge you see facing the industry right now?

I would say it’s fragmentation. Again, the user behavior within streaming is so much different. There’s so much choice. And this is why the home screen innovation is so important. We find that it takes the average viewer about 11 minutes to find what they want to watch. There are 14,000 channels. The content catalogs within these streaming channels are so robust and consumers just don’t know what they want to watch.

And from an advertising perspective, if there’s all of those channels, how are you going to buy all of them to amass and accumulate reach? And what we find is a lot of those channels don’t get consistent viewership.

So, if you think about some of the biggest channels on our platform, someone might only open them 4 days to 8 days out of the month. People are turning on their Roku device, on average, 23 days a month. So, we’re that consistent vehicle to accumulate that reach.

And we’re also seeing a trend such as serial churning, which I don’t think is a surprise to anyone. There’s so much bingeable content, someone might sign up for a channel, binge-watch a show, and then cancel it immediately and then move on to the next. And they might not watch that channel or sign up for it for six months.

So that’s the really quick, fast-moving trend that marketers have to react to. And so, I think they’re frustrated by the lack of cohesion. Even from a measurement perspective, from a targeting perspective, each partner is enabling different targeting and different measurement.

We can build that quick reach for brands in a really meaningful way. And then by sharing and passing data, we’re making it interoperable so that they can de-fragment their media buys.