Hey friends,

Imagine this… It's 2017, and you're explaining to your grandma how to "cut the cord" and use streaming instead of cable. Now fast forward to today and she's binge watching K-dramas on her smart TV while ordering products she saw advertised between episodes with just a few clicks on her remote!

This is what Connected TV (CTV) has become and it’s one of the most powerful and effective marketing channels there is today. As someone who's spent years optimizing paid social and paid search campaigns (My agency Sharma Brands has overseen multiple 9 figures in paid media spend) I initially thought CTV wasn’t the right channel for me.

I was convinced that all of the underpriced attention for DTC companies was on Meta and other paid social platforms and I thought that TV was too difficult to stand up. I generally thought it was too expensive to make the creative and I thought the targeting options weren’t precise enough or the attribution wasn’t good enough to run campaigns at scale.

That was until about 2 years ago when I started running these ads myself and I learned that I was completely wrong! When I saw the numbers around what was happening with CTV, I became super interested to try it and the results have been great so far.

I learned that 88% of US households have at least one CTV device and the average person spends over 4 hours daily watching streaming content. I learned that Roku was the number one provider of CTV devices and they had 90 million+ active accounts. They also said that they had more than 100 billion hours streamed on the platform in 2023 (I’m sure it’s a lot more now) and in the US, Roku’s active account base is now bigger than the subscribers of the six largest traditional pay-TV providers combined.

If those stats don’t get your attention, I’m not sure what will. And after Roku garnered all of the reach, all of the relevance, and all of the data, they did something genius. They launched their own self-service ads manager, Roku Ads Manager, for brands in 2024 and it changed how companies could run, measure, and test CTV. I immediately became a customer and started using their platform for a bunch of our clients.

So I wanted to use today’s email to break down why CTV is interesting to me, what’s changed, and why it matters for brands. I’ll also give you some of my secret sauce on how to make it work for you. Are you ready? Just give me 3 minutes and I’ll explain.

The truth about CTV:

CTV isn't just TV advertising 2.0, it's performance marketing with a 65-inch screen and surround sound speakers. I tell brands that if you're not already thinking about how to capture your audience's attention in their most comfortable, receptive environment, you're leaving a lot of opportunities on the table, especially with Black Friday and the holiday season coming up.

Just for context, Roku saw 34.1 billion streaming hours in Q4 2024. That’s an 18% increase in streaming hours compared to Q4 2023. We know that Q4 generally has the highest watch time for streaming as people get a break for the holidays, spend more time with their family, friends, and others and they end up streaming more than ever on the big screen.

The other thing you have to remember is that Q4 is when consumers are most ready to buy. Every year for the last few years we’ve had record-breaking BFCM sale periods. So if you combine streaming watch time being up, with the number 1 period for DTC and ecommerce sales, it becomes a no brainer as to why you should be testing this channel for your brand. I expect 2025 numbers to be just as good or better than 2024 which means there is no better time to get started than right now.

So What’s Changed? The Perfect Storm:

There are really 3 factors that are converging to make CTV advertising more accessible and effective than ever.

First, I’d say it’s inventory availability. As more content moves to streaming platforms, premium ad inventory is becoming more easily accessible to brands of all sizes, not just Fortune 500 companies with multi-million dollar budgets. The Roku Channel (their free, ad-supported streaming service) contains over 500 free channels and offers more than 80,000 shows and movies. This is all inventory you can run ads on which makes it a massive canvas to get your message in front of the right person at the right time.

Second, is the targeting capabilities. Roku now offers targeting options that rival paid social. You have standard targeting around age, gender, income and advanced demographics, then you have location targeting which lets you filter by states, zip codes and Designated Market Areas (DMA) Then you have what I’m personally most excited about which is custom audiences and genre targeting.

With custom audiences, you create an audience by uploading a .csv or .txt file containing your own customer data from Shopify and you can also create custom audiences based on event data like targeting users who took specific actions, based on activity tracked by the Roku pixel. This is really powerful and changing how brands can do more sophisticated retargeting work with CTV.

On top of that, Roku just launched genre targeting which allows advertisers to choose specific genres (i.e, drama, comedy, sports, news, etc.) that will show your ad to your target audience who likes and consumes that content. You can also exclude specific genres and content ratings like anything that’s considered G, PG, PG-13, or R rated, etc.

And the last piece is attribution.

Roku created their own pixel (which is just a code snippet you add to your website) + they have a direct integration with Shopify so you can finally track performance more granularly from CTV.

It will let you see pageviews from Roku users, add to carts, purchases and conversion data, and custom events to track things like email signups or free trials. You can also retarget your existing site visitors on Roku devices and then use their algorithms to optimize for conversions, not just impressions.

This all happens alongside being able to see CPMs, CPAs, RoAS, reach, household level frequency, and some custom metrics like CPUR (Cost per unique reach) and a few more. This makes CTV a true performance channel that can be data driven just like anything else you would do on paid search and paid social.

The other thing I’ll add is that Roku is also innovating on direct response with their Action Ads format where you can actually have a viewer click “OK” on their remote to buy your product without ever leaving their couch.

Roku uses the card on file that’s saved on their account, and with the integration via Shopify, so that customers can now checkout through Roku making CTV more like a direct response channel where people can view, click, and buy in a few seconds.

A brand that’s crushing it right now:

One example I love is Jennifer Aniston's haircare brand LolaVie which used Roku Ads to drive results across multiple channels.

They didn't just run one creative and hope for the best, they spun out multiple creative variants quickly and deployed them across Roku's inventory. After dialing in the targeting, they saw significant lift in sales to Ulta stores (proving TV's cross channel and retail impact), increased DTC traffic to LolaVie.com, and they used action ads where viewers could directly purchase LolaVie products with a single click of their remote.

The hero commercial is hilarious and so well done. You can watch it here.

Think about this ad running on a 60 inch screen with targeting to:

Women aged 35-55
Household income $75k+
Within 25 miles of Ulta locations
Watching beauty, lifestyle, or drama content (via genre targeting)
Similar to existing high-value customers (from custom audiences)

That is why it worked and performed so well and any brand can now copy this strategy.

I have a bunch of brands who will be running media on this channel in Q4 and I can’t wait to see the results. If you want to try it, you can get started for as little as $500 in media spend as long as you supply the creatives.

Best practices for creative:

My general advice is to start by repurposing your top creatives on other channels, formatting them for TV, adding a direct response CTA or testing out action ads, then using Roku’s native upscaling solution to ensure your content looks sharp on the big screen.

There are a lot of best practices for creative and Roku has some great recs as well but here a few that stand out:

A/B test your call to actions, i.e Buy Now vs Learn More, Shop Now vs Sign Up.
A/B test your offer overlays and think about adding or removing the product price, testing a % off vs. dollars off, BOGOs, bundles, a free gift with purchase exclusively for CTV, etc.
Always have a yourbrand.com/tv URL or a yourbrand.com/roku for a custom LP experience with matching creative and a matching offer.
For action ads, when thinking about ad length, the longer the video runs, the more opportunity the viewer has to "press OK" with their remote to check out. This is why 30s seem to do better but you can also test 15 second ads.

This is just a bit more tactical than simply making your offer clear, having a story driven ad, or using UGC creators vs fully scripted and produced commercials, etc.

IMO, every “format” can work, you just need to experiment and A/B test between the different options to see which works best for you. That means testing founder story driven ads, comedy driven skits, fully scripted and highly produced creative vs more organic, iphone style content.

Then you review the metrics on sales and double down on the hooks, angles and formats that are working best for your specific brand.

The last thing I’ll say here is that you also wouldn’t believe how easy this all is to set up. Roku’s UI makes it so that anyone from a CMO to a junior assistant could upload creative, select the targeting options, set a budget and go live within a few minutes. Roku has completely removed the friction and made it easy for all brands to run ads on CTV. If you want to try this out, you can do that here and you can use code NIK5000 to get free ad credits for your account. Terms apply.

Alright, that’s all for this week.

If you have any questions about CTV, just let me know. I’d be happy to answer them in a future email or episode of Limited Supply.

Thanks for reading and I’ll see you on Sunday!

Nik