It may seem like Roku is already overloading the Roku home screens with too many ads, but apparently there's room for even more. AdExchanger reports that they were told by Kristina Shepard, Roku's VP of global ad sales and partnerships, that we can "expect to see Roku 'immerse advertisers in more parts of the home screen' via interactive and shoppable ad formats."
You may think that ads should be non-existent because you already paid for your Roku device, but Roku didn't make any money off of your hardware purchase. According to The Motley Fool's Adam Levy, Roku sold $471 million worth of streaming devices over the 12 months that ended in Sept. 2023, but Roku's manufacturing cost was $538 million. And that's just manufacturing, which doesn't account for overhead costs, marketing, or research and development. Roku's real business is not TVs and streaming media players, it's advertising, which produced $2.9 billion in revenue for Roku during the same 12 months. Basically, advertisements on the Roku platform are subsidizing the cheap hardware.
Roku, of course, is not the only brand to be pushing ads on their devices. Amazon Fire TVs, for example, last year started auto-playing full-screen ads when the device is turned on. Vizio tested pop-up ads over TV shows in 2022 and now sells "direct-to-device ad experiences" on their TV home screens.
While many Roku users will hate the addition of more ads to the Roku home screen, most users will undoubtedly just ignore them and click on through to whatever app is streaming the content they came to see. But many more will interact with those ads, as evidenced by a Vizio case study showing that "audiences exposed to the Home Screen promotions tuned in more than twice that of those who weren't exposed to the promotions (lift in tune-in from control to exposed audience was 119%)." As pointed out by AdExchanger, "One of the selling points of home screen inventory is that it's an opportunity for marketers to reach viewers who stream without ads before they disappear into an ad-free app."
