Roku on Tuesday said it agreed to buy dataxu, a demand-side advertising platform, for $150 million in cash and stock.
The acquisition will give Roku new tools to let advertisers plan and buy using programmatic technology ad campaigns to reach Roku’s streaming and over-the-top viewers. Ad sales are growing faster than hardware sales at Roku and are projected to hit $632.9 million in 2020, more than double the take from 2018, per eMarketer.
“TV advertising is shifting toward OTT and a data-driven model focused on business outcomes for brands,” said Roku CEO Anthony Wood. “The acquisition of dataxu will accelerate our ad platform while also helping our content partners monetize their inventory even more effectively.”
Ad tech and data firms have been merging and getting acquired as demand for over-the-top and streaming video advertising grows. Last week, AT&T’s Xandr unit said it was buying clypd, another ad tech company.
According to media buying firm Magna Global, OTT accounts for 29% of TV viewing but so far has only captured 3% of TV ad budgets. As viewers continue to migrate to streaming, automated media buying solutions are expected to unlock more advertising investment into OTT, Roku said.
The acquisition agreement has been approved by each company’s board of directors and is anticipated to close in the fourth quarter of 2019, subject to customary closing conditions, including regulatory approvals.
Roku will discuss the acquisition on its upcoming third quarter financial results conference call.