Roku, Best Buy promise greater CTV precision through retail media pact

Dive Brief:

• Best Buy and Roku are looking to combine their respective strengths in retail media networks and connected TV (CTV) through a new partnership, per a press release. 
• Ads running on the Roku platform can now be targeted, measured and optimized against first-party data from Best Buy to increase relevance and improve performance. Best Buy operates a Best Buy Ads network that draws on both brick-and-mortar and e-commerce shopper information. 
• As part of the deal, the consumer electronics giant will also be the exclusive retailer for the first TVs designed and manufactured by Roku, called Roku Select and Plus Series. The collaboration could help both companies capture more spending as marketers ramp up their bets on retail media.  

Dive Insight:

Roku and Best Buy see the opportunity to secure more brand dollars by wedding their data skill sets together. Through the agreement, Roku has a potentially stronger pitch for advertisers that are hungry for first-party data with the deprecation of cookies on the horizon. Meanwhile, Best Buy gets access to a scaled CTV network and inventory. Roku currently reaches about 70 million active accounts, according to the release.

The collaboration comes as 82% of advertisers were expected to increase their investments in retail media last year, per eMarketer data cited by the companies. That momentum isn’t expected to slow in 2023 despite an uncertain macroeconomic environment that’s led to pullbacks elsewhere. Researcher WARC forecasts that retail media will be the fastest-growing media channel globally this year, reaching $122 billion in revenue.

Roku and Best Buy are promoting their partnership with an in-person activation at the SXSW conference in Austin, Texas, this weekend. The pop-up brings to life a heavily memed Roku screen saver depicting a fictional city, with a home theater experience supplied by Best Buy. 

Roku has turned more frequently to collaboration to bolster its business, which has expanded into areas like original content. Last year, it struck a partnership with Walmart — another major retail media player — to pilot shoppable streaming ads. Roku viewers served Walmart ads can press a button on their remote to be sent to a checkout screen, with orders fulfilled by the big-box store.  

On the retail end of the industry, more mature media networks are making the jump from basic sponsored search and display formats into premium areas like video. The grocery giant Kroger in September added CTV and video inventory into its programmatic advertising marketplace.

Roku and Best Buy teaming up comes as both encounter headwinds. Roku has been contending with tightening ad budgets and reported flattish revenue growth in the fourth quarter. Best Buy has felt a pinch as consumers cut back on spending. The retailer saw revenue down 10% in Q4, a key window that includes the holidays. It recently said it could close as many as 30 stores this year.