Roku, Instacart team to quantify TV streaming ads impact on product sales

Coinciding with the release of first quarter results, Roku on Wednesday announced a new partnership with Instacart that will see the streaming platform and grocery delivery service team up to leverage first-party data to measure the impact of streaming ads on e-commerce buys for marketers.

Roku is bringing in viewership data from its streaming platform in the U.S., Canada and Mexico, paired with purchase data insights from Instacart to allow marketers to measure if viewers are buying products on the grocery delivery service after watching an ad on Roku. On Wednesday Roku disclosed growing net active accounts by 1.6 million over Q4, to now reach 71.6 million – it’s also over 10 million more than Roku had at the end of Q1 2022. Streaming hours on its platform also continued to climb, up 4.2 billion year over year to 25.1 billion hours.

Matching the datasets enables CPG (consumer-packaged goods) advertisers to quantify the impact of TV streaming ads on product sales while also keeping customer data from both platforms secure, the company said.

“Our goal is to help marketers get more of what they love in TV,” said Alison Levin, VP of Ad Revenue and Marketing Solutions at Roku, in a statement. “Our partnership with Instacart makes it easier to measure actual return on advertising spend in e-commerce and meet consumers where they are – streaming TV." 

It marks Instacart’s first TV streaming measurement pact and means advertisers will get consumer purchase data from the Instacart Marketplace, which includes more than 1,100 retail banners and more than 80,000 stores in North America. It’s Roku’s latest data sharing partnership, having inked an agreement with Best Buy earlier this year to help better target ads on the streaming platform leveraging the retailer’s first-party data (for a deeper dive on how CTV presents opportunity for retail media networks read here). It’s also delved into interactive ads and shoppable TV through partnerships with DoorDash and Walmart, respectively.

Speaking to Fierce Video this week ahead of Roku’s NewFronts presentation, Kristina Shepard, co-head of U.S. brand sales said the company wants to “push for as many of these partnerships as possible.”

As for Instacart, partners have already conducted pilots across select partners and said that results found, on average, that people who saw the ad on Roku purchased more of the advertised product on Instacart compared to the average consumer.  And in a pilot with a personal care brand 60% of those who purchased a product from that company after seeing its campaign on Roku were new to the brand. In another pilot with a beverage brand, Roku said viewers who were exposed to the campaign on Roku and were new buyers of the brand clocked a 70% higher repeat rate than the average buyer on Instacart who was new the beverage brand.

Roku believes the new relationship will help speed up the shift of ad dollars into streaming TV and retail media, while also noting growth of online grocery delivery with Instacart available to over 95% of households in the U.S. and Canada.  A recent forecast from Magna projected slightly slower growth for all-media ad revenues in 2023, but called out retail media networks as a segment that’s an organic driver helping to mitigate the impact of some challenging economic signals on ad revenue.

“Such organic drivers include the rise of retail media networks which are redirecting billions of marketing budgets dollars into advertising formats,” stated report author Vincent Létang, EVP of Global Market Research at Magna.

Roku itself in Q1 earnings called out the Instacart partnership as an example of how the relationships help to differentiate it in the ad market.

“These partnerships allow us to enhance targeting, attribution, and measurement for our shared ad customers, which further differentiates our ad offering from those without a direct relationship with the consumer. In Q1, advertiser spend leveraging first- and third-party data continued to grow YoY,” wrote Roku in its Q1 2023 letter to shareholders.

As for financial results, the company recorded tepid 1% net revenue growth in Q1 to reach $741 million, as platform revenue declined by 1% year over year to $634.6 million and device revenue climbed 18% to $106 million. Total operating expenses soared 42% to $550 million, with Roku reporting a quarterly net loss of $212.5 million. Q1 Adjusted EBITDA plummeted to negative $69.1 million.