Roku is buying demand-side platform Dataxu for US$150 million in cash and stock, as part of a growing movement from TV platforms to build inhouse advertising capabilities.
The acquisition agreement has been approved by each company’s board of directors and is anticipated to close in the fourth quarter, subject to regulatory approvals.
Dataxu has been doubling down on its advanced TV capabilities over recent years, with TV advertising now making up the majority of its revenue. The Boston-based business provides technology to Viacom and Sky in the UK, and is the default targeting and measurement solution for OpenAP, a TV data consortium backed by Fox, Viacom and NBCUniversal.
Roku is the top TV streaming platform by hours in the US, according to a June 2019 comScore analysis, and counts 30.5 million active users.
Announcing the deal, Roku said the adtech firm will allow it to provide marketers with a single, data-driven software solution to plan, buy, and optimise ad spend across TV and OTT providers.
It noted that the market for OTT advertising will continue to expand “as viewers continue to migrate to streaming”. Today, advertisers spend over $70 billion on traditional TV. Over-the-top viewing accounts for only 29% of TV viewing, but has so far only captured 3% of TV ad budgets, according to Magna Global.
“TV advertising is shifting toward OTT, and a data-driven model focused on business outcomes for brands,” said Anthony Wood, chief executive officer at Roku, in a statement. “The acquisition of dataxu will accelerate our ad platform while also helping our content partners monetize their inventory even more effectively.”
TV platforms around the world are either acquiring or building up their advertising capabilities inhouse to scoop more TV budgets. AT&T, which owns media conglomerate WarnerMedia, bought AppNexus last year and subsequently merged it into Xandr, while on this side of the pond Iflix has been rapidly growing its ad capabilities through a string of partnerships.