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Why On-Demand Platform Upfronts are Not Great for Performance Marketing

Roku had their most successful upfront to date in 2021. This doesn’t come as a huge surprise, given that viewing habits have been shifting to streaming or other CTV platforms and the pandemic accelerated that trend by 5+ years in our estimation. In fact, streaming usage across all television homes has climbed to 26% of all time spent on TV.  Some could attribute Roku’s success at the upfronts to the launch of their OneView platform, making it easier for new-to-streaming advertisers to manage their streaming budgets. It could also be credited to the platform’s newly acquired Quibi content and Roku Originals. Roku made a huge push to court linear ad dollars, and it paid off.

As the first on-demand platform to make the upfront push, Roku had a wildly successful year with first time CTV buyers. These advertisers made up 42% of Roku’s upfront commitments this year and their retention rate on upfronts advertisers is over 95%. For the first time ever, they completed their upfront business a quarter earlier than in years past, ahead of Discovery, an upfront week presenter.

On the other side, holding companies wrapped up their streaming upfront buys before their linear commitments were complete. This signals a sea change in the marketplace, as broadcast has always been the cornerstone of any upfront commitment.

What does this mean for performance marketers?

Optimization is the key to success for performance marketing. Having the flexibility to shift inventory to maneuver in the ever-evolving marketing landscape is something lost when placing upfront buys. This holds true for upfront streaming deals as well; if efficiency is the objective, auction-based programmatic and PMP deals are the way to go.

Unlike Linear TV, OTT inventory is incredibly flexible because its auction based. Buy today, air tomorrow. It’s a huge shift from the traditional Linear TV way of buying, but it’s even more flexible with incredible opportunity for optimization – a huge plus for performance marketers.

Roku played this years upfronts well. They focused their attention on first-time streaming inventory buyers, creating a platform that made it easy for advertisers to manage their streaming budgets and purchase inventory like they’ve purchased linear upfront inventory for years – in other words: set it and forget it.

But . . . how do performance marketers feel about on-demand platform upfronts? If the name of the game is performance and efficiency, they’re a waste of time. Why purchase inventory upfront that you can’t optimize? Lucky for us, Roku clearly capitalized their short window as the first on-demand platform to make the streaming upfront push more feasible for first time streaming buyers and it panned out for them, this year. Next year, there will no doubt be dozens of other platforms that will make this same shift to streaming upfronts, that’s ok though . . . we’ll just be over here swimming in the flexible and efficiency-focused auction pool. If sales efficiency is your main objective, go ahead and jump in—the water’s warm!

About the author

Rebecca Barr, Executive Vice President, Media Strategy & Investment

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