Roku is strengthening its OTT ad proposition to marketers by acquiring dataxu, a demand-side advertising platform, in a cash and stock deal valued at $150 million.
In dataxu, Roku is getting an automated bidding and self-serve software solution to manage ad campaigns programmatically across digital platforms. The company is buying dataxu’s proprietary device graph and data science to allow marketers to optimize for business outcomes across TV, OTT, desktop and mobile. Dataxu’s team is also coming over to Roku.
The acquisition has been approved by each company’s board of directors and is anticipated to close in the fourth quarter of 2019. Roku plans to discuss the deal further on its upcoming earnings call.
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“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.”
Dataxu will help reinforce Roku’s strategy to grow its platform revenues largely through advertising. Advertisers spend more than $70 billion on traditional TV advertising but. According to Magna Global, OTT accounts for 29% of TV viewing but currently only accounts for 3% of TV ad budgets.
During the second quarter, Roku’s total revenue rose 59% year over year to $250 million and platform revenues accounted for more than two-thirds. The company’s monetized video ad impressions again more than doubled year over year.
Roku’s 30.5 million total active accounts as of June were up 39% year over year from the 22 million the company counted during the year-ago quarter. The company’s average revenue per user surpassed $20 to reach $21.06, up 27% from $16.60 from the year prior.