Louqman Parampath, VP, Product Management, Advertising at Roku, joins Cross Screen Media CEO Michael Beach to share his insights on what the future of Connected TV looks like after experiencing tremendous growth in 2020. Louqman also shares details on Roku’s deal to acquire Nielsen’s Advanced Video Advertising as well as its acquisition of Quibi’s content library in our latest Screen Wars Thought Leader Interview. Watch the interview here and read the full transcript below!
Michael Beach: Louqman, thanks for joining us today.
Louqman Parampath: Thank you for the invite, Michael. Great to be here.
MB: Absolutely. We’ll start off with an ice breaker that we ask all our guests. What was your first job and what lessons did you take away that you’ve applied to your career?
LP: Good first question. Let me start with where I went to school. As a kid, I was academically oriented, loved solving problems, math, and other nerdy subjects. I was not really a tinkerer of tech or gadgets, but I liked video games, software, coding, and so on. I ended up doing an undergrad in engineering before I moved to the US. One of my first jobs in the US was as an engineer for a company where my focus was writing algorithms to improve audio quality for internet phones, voice-over IP software. This was way before you had broadband everywhere and internet calling was riddled with bad audio quality.
It is way better now. The audio experience of this call is nothing like what it was 20 years ago. That was my first true job. It was a small scrappy company and it was around the time of the big dotcom crash 20 years ago. So, I learned a bunch of lessons. The big lesson was to do whatever we do professionally, you could really work hard, but your impact can be amplified substantially if you can see trends and catch them on time. If you can actually forecast market trends your effort can be multifold amplified.
Another key lesson that I use from those days is about playing to your strengths. Everybody has strengths and weaknesses, but we shouldn’t dwell too much on our weaknesses. Just make sure your weaknesses are not too debilitating but continue to work on your strengths so that you can truly provide value. Right? You can be truly a standout performer if your strengths are almost unmatched.
MB: How did you transition from there to the convergent TV space?
LP: After that, one of my first jobs as a product manager, and I consider myself basically a product manager who loves building products and is a builder at heart, one of my first, true product jobs was when I was responsible for monetizing websites for a company in LA and the primary way you monetize websites is through advertising. This is how I started learning about advertising technology, ad serving, programmatic, the data, and algorithms that go into making sure you show the most relevant ad to the right consumer at the right time. All of the brains that go into digital advertising today. That’s how I got into ad tech and increasingly I spent quite a bit of time around on display, digital, mobile, and then video.
When I was working on video advertising a few years ago, I spent a lot of time on linear addressability and how linear ads or linear advertising are still very different from digital. So, when Roku was building out a team for connected TV six years ago to focus on advertising and monetization of the Roku platform, I had the good fortune of landing a job here. It’s been six years now at Roku, where I’ve been focusing on a connected TV. I was bullish about connected TV at that point in time, because of the work I’ve done on ad tech and addressable TV. I did see connected TV as the true end state for TV, advertising on TV. Our belief is that all TV will be streamed and all TV advertising will be streamed.
MB: The past six years it’s been really exciting to watch Roku lay the groundwork for the future of TV advertising and one monster deal that our community has been really interested in was the acquisition of the Advanced TV operations from Nielsen. Would you mind giving our community background on the deal and where you see that moving forward?
LP: Absolutely, Michael. We’ve recently announced that we acquired Nielsen’s Advanced Video Advertising business. The deal was signed six weeks ago and closed yesterday. So, happy to announce that we closed that deal, which includes a few things. One is Nielsen’s video ACR, and one is their video DAI technologies. I’ll talk a bit about both of those. ACR is automated content recognition. It is the capability for us to actually enable the tech on Roku TVs and we have enabled that. Nielsen was the partner for our ACR tech for quite some time, it lets us, with user consent and after getting user opt-in, we can actually collect information about viewership on Roku TVs that can be used to power better content recommendations and better options for them to show content, show movies, show TV shows to the user, and to promote better advertising to the user.
We use that quite a bit on our content and ad recommendation platforms. So this acquisition will bring some of that tech in-house, number one. Secondly, Nielsen has been investing quite a bit in their digital ad insertion technology, which we will now own and the acquisition will accelerate our launch of an end-to-end dynamic ad insertion solution, which effectively is the ability to replace linear ads on traditional TV. When I say traditional TV, that is TV that you watch over broadcast or your cable set-top box, those ads that you watch, which are not very targeted or relevant. You and your neighbor probably see the same ad on traditional TV on the same channel. We can make it targeted to a particular household based on their income and so on and so forth.
We make sure that a person who is single does not necessarily see an ad for Pampers or baby products. So that kind of targeting available in digital ad tech can now be available in linear advertising with DAI. That’s the goal, that’s the vision behind it and we believe that this will represent a substantial improvement for traditional TV. It provides additional revenue opportunities for programmer ad sales teams who can now sell addressable advertising and the data targeting and measurement that marketers want. Once fully integrated, marketers will be able to buy audiences seamlessly across TV streaming and traditional TV on Roku.
MB: Obviously a huge deal for the entire industry and another area you talked about recently is how connected TV is really one of the only media forms that is effective at all parts of the funnel. We still find today that there are people focused on top of funnel or bottom of funnel metrics, but really that an ad format like video on a connected TV can really impact all those, can you provide your thoughts on that?
LP: Yeah. That is how we look at connected TV and it has resonated well in the market that it is truly a medium for the entire marketing funnel. Like I said, Roku was founded with the belief that the future of all TV will be streamed, which also means that all TV advertising will be streamed. So CTV is uniquely positioned in the sense that it is the only media that can be effective across the marketing funnel. It brings the best of traditional TV, the branding capabilities of traditional TV, sight, sound, and motion to the advanced one-to-one targeting measurement and performance of digital and display TV, because it is all internet-connected. Marketers are already familiar with performance marketing from other digital channels, display ads, social banners, etc.
But as they try to expand from those channels, especially to something like streaming, and TV streaming offers the marketers their attribution tools and the opportunity that they’ve historically had around targeting and measurement onto television, onto television via streaming. That is ultimately the story here, combining the precision and reach of digital with the visual beauty of TV. Streaming effectively offers the best of digital and TV. Typically, streaming audiences are highly engaged and very receptive to the ads that they see, as long as it’s relevant and the ad load is reasonable. We see a lot of advertisers who say they have found that the ROI from streaming ads is higher than what they even get from social media.
MB: Well, your earlier point about the belief that all TV will be streamed, therefore all advertising will be streamed probably explains most of this. As you look forward with that worldview in mind, where do you think the connected TV ad ecosystem has the most room to grow?
LP: Well, I’ll cover two points that I think are areas where connected TV has distinct advantages and that’s how the growth will be funneled. One, as CTV is very fragmented, identity will be an important ingredient to get the ad experience right on connected TV and we believe that the challenges . . . You may have heard of the challenges to third-party cookies and mobile identifiers. I just did a session at Adweek today, talking about identity in streaming and how having a first-party direct relationship with the consumer at scale is the most effective way in which you can solve the problem of identity in ad tech today. Connected TV offers that. Roku, for instance, is a 100% logged-in experience where every consumer logs into Roku, and that offers us a deterministic way to reach that consumer and build an identity capability that is more accurate, more precise, and ultimately can provide better ROI for the marketer.
If I may go a little deeper, this offers a platform like ours or large connected TV platforms to build a reliable household identifier that does not need stitching together of IDs from different publishers and advertisers. So, connected TV will grow around identity and the capabilities around building a deterministic identity to improve reach for our marketers, to create better experiences for consumers across different touchpoints, so that they don’t see the same ad from one platform to the other and so on.
Another area I want to highlight is the innovation in connected TV around new ad formats. We do think streaming or CTV is uniquely suited to go beyond traditional 15- and 30-second video spots. At Roku, we do sponsored experiences, interactive ad formats. We recently released an ad format where you can promote a brand when they use the process on content in the Roku channel, which is our own ad-supported channel. These new ad experiences are ways in which brands can talk to the consumer at a point where it is less disruptive, more innovative than your 15- and 30-second spots. We also launched a brand advertising studio, which is our way of looking at how to expand into branded content and create new ad experiences that leverage our home screen access and ultimately make sure that when a brand is touching a user, it is doing so in an innovative way that works for the consumer too.
MB: It’s pretty early in the process, but Roku has started to expand out beyond the United States. As we look at Netflix, one of the things that’s been extremely impressive is to watch a company like that add global scale, right? My personal thought is that expanding globally is something the market really can’t comprehend yet. I know you’re early in the process, but what are the challenges of expanding globally?
LP: International expansion is a big focus area for us and I think we have been very public about it. We are looking at other markets. We are available in Canada, we are available in the UK, we have entered LATAM. The challenge starts with content. Ultimately, we want to create an experience. We want to make sure that we have the right library of content to engage users, to drive users to spend more time on the platform, right? In markets where we are, it starts with getting the right set of content and many of our partners are global partners. They do work reasonably well, but there is also a need for really differentiating local content in those markets, and that’s an area we are putting more focus on.
In markets where we are not present yet, it’s also about getting devices out there. So what is the right strategy? Do we go with the TV operating system licensing model that we’ve historically done, where we license our operating system to TV OEMs and get into those markets, and so on? So I think the question is different depending on the market too. I mean, Western Europe is somewhat similar to the US, but if you go beyond that, the markets are very different and the monetization potential is also very different. We need to factor all of that in as we pick the markets to go to. We have seen a lot of great growth in the US. The last publicly announced number was 51.2 million active accounts for us, mostly coming from the US, but we expect the next big wave of growth for us to come from international users.
MB: Yeah. I think that’d be something our community definitely is going to watch to see how quickly you scale. When you look at the company, it is hard to place the proper value on it because we don’t know how quickly it will scale.
LP: I completely agree. Our ambition and aspiration as you know is that all TV will be streamed and we are streaming all of those TVs globally.
MB: Touching on the content question, another big announcement was the acquisition of Quibi’s content recently. The big question is about original content. Is this more of an experiment or is this something we should expect to see more of moving forward?
LP: As the number one TV streaming platform in America, and we have grown because we offer great content choices at a great value to our users, we know there is significant demand for compelling ad-supported content and so we want to continuously add new choices to the platform. The Roku channel has done spectacularly well for us. We launched it almost four years ago for free ad-supported content and you’re seeing the growth of that ad-supported content vertical across the space, right? So we believe the opportunity to view new compelling content from leading creators will be appealing to a broad range of TV viewers. For those who are drawn to channels like the Roku channel to watch such new and exclusive content, we also feel this is an opportunity to get them in the Roku Channel more and discover other great content while they are there.
As the Roku Channel scales, it will enable us to be more creative and expansive in sourcing cost-effective content, which is what is happening. It is scaling very, very fast and that is giving us the flexibility to source better and differentiated content. As we do that, we want to continue to ensure that our content spend fits our overall economic model and our scale. From an advertiser perspective, it’s also a fantastic opportunity to reach an engaged audience through such brand-safe content that has broad appeal. So the more relevant the content is for a larger audience of our users, the more appealing it will be for our advertising partners. That’s the flywheel effect we want to keep generating.
MB: Okay, as you look out five to 10 years in the video space, what do you expect your customers to keep doing, start doing, and stop doing?
LP: I mean, five years is a long time and the market moves very, very quickly nowadays. What happened last year was, with the pandemic, it just supercharged the growth of TV streaming faster than even we predicted, and we believe that growth will continue. Some of those changes are structural. They’re not going to be switched off. It’s not like a tap where you can turn it on and turn it off. Once on, it stays that way. These are the structural changes that have happened. Consumers are saving dollars now, getting access to an immense catalog of great content and gaining an overall easier, seamless viewing experience. So we do think traditional TV will continue to reach only older audiences and will no longer reach younger audiences and it will stay very, very expensive.
So, our general thinking is that this will be the streaming decade. This is the decade where all or most viewing will move into streaming and that acceleration will continue. Marketers investment in TV streaming has accelerated. Roku is America’s number one TV streaming platform. We work with 90% of the top Ad Age advertisers and the largest six agency holding companies, all closed upfront with Roku and more than doubled their investments year-over-year. So these are all signs for the way in which advertising spenders are moving. Another trend, mostly from an advertising perspective is also the growth in programmatic. We expect programmatic to grow in connected TV and follow a path similar to digital.
There will be some differences, but it will become increasingly programmatic and automated. There’ll be unique capabilities that programmatic platforms will have to build and we invested in OneView, which is our demand-side platform, our ad buying platform, specifically for streaming with unique capabilities that only we can offer to our advertiser partners. So we believe programmatic is definitely a big growth area and you’ll see more and more CTV move programmatic in the next five years. The other area is new ad formats and new ad experiences. They will continue to evolve and you will see new ways in which a brand can touch a user and still continue to create a great experience for the user and you will see more and more of media budgets move in the direction of these innovative ad experiences.
MB: Well, is there any area that we haven’t talked about that you think is a key area we should be focusing more on?
LP: I don’t think so. We covered the broad market landscape, importance of content, and growth in programmatic.
MB: Great. Well, we’ll get you out here on one more question that we ask our whole community and all our guests here. If you could get your whole team to read one book right now, what book would that be and why?
LP: Yeah. The book I’m reading right now, which is an excellent book and that would be the one I would recommend, is a book called 10 Lessons for a Post-Pandemic World from Fareed Zakaria. He’s on CNN at 10:00 AM Pacific on Sundays. There’s a show called a “Global Public Square” with a lot of content around what is happening in the world, it is a very international outlook that he brings. This is an excellent read for anybody who’s interested in how things will change post-pandemic. He has some great insights into how government and technology and media and society will evolve and how we can be a better community, better as a species overall with the lessons that we can take from what is one of the most seminal events in our lifetimes, the pandemic. So it’s an excellent book, 10 Lessons for a Post-Pandemic World.
MB: That’s a great recommendation and I love the show on Sundays. Louqman, I appreciate and am grateful for your time and I know our community is going to really enjoy this talk.
LP: Well, thank you. Thanks a lot for the invite.
MB: All right. Thank you.
See the rest of the Screen Wars Thought Leader Interview series here!
Louqman Parampath leads product management around Ad products at Roku, where he is responsible for building new capabilities on the Roku platform to support Roku’s growing Ad business. Prior to joining Roku, Louqman held product management roles at Acxiom, Yahoo!, EarthLink and more. He has more than 15 years in product and engineering roles with a recent focus on ad tech, digital media and data analytics.
He holds a M.B.A from the Anderson School of Business, UCLA and an undergrad degree in electrical engineering.
Cross Screen Media is a marketing analytics and software company empowering marketers to plan, activate, and measure Connected TV and audience-driven Linear TV advertising at the local level. Our closed-loop solutions help brands, agencies, and networks succeed in the Convergent TV space. For more information, visit CrossScreenMedia.com.