Dive Brief:

• Roku today is launching a branded content studio to expand its range of advertising formats and TV programming for marketers, per an announcement emailed to Marketing Dive. The studio will create short-form TV programs, interactive video ads and other branded content on The Roku Channel, the company's ad-based video-on-demand (AVOD) hub.
• The company's new studio will build on its existing offerings, which include sponsorships and native ads. Examples of recent campaigns includes Roku's partnership with Intuit's TurboTax software on a "college basketball game guide" during March Madness. Roku users can unlock free college basketball content and an augmented reality (AR) lens on their connected devices, per the announcement.
• Several people from the branded entertainment division of content studio Funny Or Die will join Roku as part an agreement between the companies. Chris Bruss and Brian Toombs from Funny Or Die and Rachel Daly Helfman from social media company Snap will join Roku's Patrick Colletto in leadership roles at the brand studio. Kroger, Lyft, Ralph Lauren and Wendy's are among the companies that have worked with Roku's new hires on branded content campaigns.

Dive Insight:

Roku is launching a content studio to help marketers create branded experiences that stand out amid a cluttered advertising landscape. The average consumer is said to see thousands of ads a day, challenging marketers to boost awareness and purchase intent. Branded experiences alongside video advertising generate four times the purchase intent than video advertising alone, according to data cited in a 2020 report by Magna, Roku and IPG Media Lab. The study also found that 61% of streaming viewers who said they interacted with a branded experience were more likely to notice the ad.

"The shift to TV streaming has accelerated and leading advertisers are going beyond the 30-second ad," Dan Robbins, vice president of ad marketing at Roku, said in the announcement. Roku plans to provide more details about the branded content studio at its IAB NewFronts presentation on May 3.

Roku's launch of a branded content studio comes as the company expands its user base, diversifies revenue sources and adds original content to the Roku Channel. Amid the cord-cutting trend, Roku's active accounts jumped 39% from a year earlier to 51.2 million by the end of 2020, per a quarterly earnings report. Revenue for its platform business that includes advertising sales surged 82% to $471.2 million during that period. Roku estimated that ad spending will continue to grow following the strength in Q4, when the six biggest agency holding companies more than doubled their spending on Roku and expanded their 2021 commitment to its upfront sales.

Roku also has touted its strength compared with linear TV, where the median age for viewers of the three major broadcast networks is more than 60 years old, partly because younger viewers are opting for streaming services. To expand its original programming on the Roku Channel, the company last month agreed to buy the rights to content from Quibi, the mobile video service that launched and closed down last year.