How Roku is remaking the market for advertising on streaming services

Following the introduction of Roku Ads Manager, the streaming platform gets top billing in helping advertisers reach consumers while they watch their favorite television shows, says Fidelity's Becky Baker.

• As the market for advertising on streaming services has evolved, with Netflix, Disney+ and others shifting their focus from rapid growth to profitability, Roku has done a good job weathering the business interruption, primarily through the late-2024 introduction of Roku Ads Manager, according to Fidelity Portfolio Manager Becky Baker.
• "As a streaming platform, Roku historically depended on streaming services for advertising revenue, so Roku's sales dried up when some customers became more selective with their advertising in response to an uneven economy and high interest rates," says Baker, who co-manages Fidelity Advisor^® Growth Opportunities Fund with Kyle Weaver.
• In helming the domestic equity strategy, Baker and Weaver focus on companies with a distinct growth profile, anchored by a philosophy that the market can often miss nuances of a company's business that can have profound implications for the long-term value of the enterprise.
• With that in mind, Baker explains that Roku Ads Manager, the company's self-service advertising solution for connected TVs, could be a game changer, providing performance features like advanced targeting, conversion optimization and measurement, and even shoppable ad formats.
• Roku Ads Manager has allowed Roku to look beyond streaming services and expand its ad offerings to better serve small and medium-sized businesses, says Baker.
• "For advertisers, it means more choices in how they buy advertising from Roku, whether it be through direct insertion orders, a preferred demand-side platform such as The Trade Desk, or self-service," she says.
• Roku's partnership with The Trade Desk, announced in April 2024, is especially worthy of mention, according to Baker. It is a self-described "omnichannel advertising platform built for the open internet."
• Baker explains that The Trade Desk's self-serve, transparent software helps advertisers use available data to reach audiences on the internet at every stage of the marketing funnel — from awareness to engagement to conversion.
• The Trade Desk hopes to offer advertisers on its platform the ability to leverage Roku audience and behavioral data, powered by Roku's global footprint of roughly 90 million streaming households (as of early 2025).
• Roku management says the company has already seen the benefits of this arrangement, and it is actively working on other tie-ups that could expand its ability to "serve the entire demand curve at multiple price points." In doing so, Roku expects to drive incremental revenue over time.
• Looking ahead, Baker says she and Weaver will be closely monitoring these developments and are optimistic about prospects for Roku and streaming services, such as Netflix and Amazon.com — all fund holdings at the end of May.