POV: Roku to Acquire DataXu

Background:

Roku announced on Tuesday that it will acquire DataXu, a demand-side platform (DSP) for $150 million. The acquisition deal is expected to close in the fourth quarter and will strengthen Roku’s self-serve ad buying capabilities and help it attract more advertising dollars.

Details and Implications:

Roku is a leading OTT platform with over 30.5 million active accounts in the US. The platform streams more ad-supported hours than any other OTT media service, according to a June 2019 comScore analysis.

DataXu is a DSP that provides tools for advertisers to programmatically buy ads across connected TV, addressable TV and online. Dataxu also operates an identity and data management platform that combines advertisers’ own data and data from third-party sources to build a device graph that enables it to track how individuals are exposed to ads across different platforms.

The acquisition of DataXu gives Roku a self-serve buying platform that hooks into both its own and other OTT premium video supply, as well as display and cross-platform media. It will help position Roku to operate a marketplace for the OTT industry.

According to Anthony Wood, CEO at Roku, this deal will accelerate its ad platform and help its content partners to ‘monetize their inventory even more effectively’. OTT accounts for 29% of viewing, as more and more viewers are favouring these platforms over TV viewing.

This tech merge is further evidence of actionable audience data driving the new wave programmatic agenda. In recent years, we have witnessed Google, Amazon, Verizon, ATT and SingTel all investing heavily in a proprietary DSP solutions to allow marketers to tap into and activate against their rich first-party audience segments.

From a marketers’ perspective, whilst this is very exciting, especially for reaching the challenging OTT audience, the reality is that this may yet be another ‘walled garden’ platform offering that marketers will need navigate around.

For Roku, this acquisition might prove to be good value. Considering the cost of other AdTech platform acquisition fees paid in the past, the $150 million price tag might be well worth it, providing they can help turn the DSP’s fortunes around.

Summary:

The merge of Roku, a leading OTT platform, and DataXu, a marketing platform for video advertising, reflects the current climate in TV advertising. The acquisition could prove to be very exciting for marketers and equally might be a lucrative deal for Roku.

Further Reading:

Adexchanger | Adweek | The Drum | AdAge