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• Transcript

  James Kotecki (00:00): 

  This is CES Tech Talk. I'm James Kotecki, bringing you one of my favorite C Space Studio interviews from CES 2024. I had a lot of great conversations in Las Vegas, and I know you're going to like this one, so enjoy. 

  (00:24): 

  Welcome back. You're in the C Space Studio here at CES 2024. We are sponsored by Integral Ad Science. I am James Kotecki. I'm very happy to welcome Kristina Shepard of Roku, Global Head of Sales. Thanks for joining me. 

  Kristina Shepard (00:38): 

  Yes, thanks for having me, James. 

  James Kotecki (00:40): 

  Roku, how do you define the Roku? I'm a Roku user, so I do have a pretty good idea of what the Roku brand- 

  Kristina Shepard (00:40): 

  Love to hear that. 

  James Kotecki (00:45): 

  ... is, or at least some aspect of it. But how do you define the Roku brand here at the beginning of 2024? 

  Kristina Shepard (00:52): 

  Yeah, so we've been a company for 15 years, and we've been building the platform for consumers first. We've been driving household penetration. We're the number one streaming platform in America, reaching about 76 million households. 

  (01:04): 

  And so what we're really making a shift on is that we've been building the streamer's experience for the consumer, and now in 2024, you're really going to see us invite marketers into the experience to be able to tell their stories in new and innovative ways. 

  James Kotecki (01:18): 

  Okay, so let's talk about that. 

  Kristina Shepard (01:19): 

  Yeah. 

  James Kotecki (01:19): 

  And what are some of the messages that you are here at CES to deliver? I assume that you're talking to some of those marketers while you're here? 

  Kristina Shepard (01:27): 

  Yes. 

  James Kotecki (01:27): 

  What are some of the things you're talking about? 

  Kristina Shepard (01:27): 

  Yeah, so we're here, I think, as a lot of other media companies to officially kick off the upfront season. It's our kind of walk to the new front coming in April. And so when we're talking to marketers in these closed door meetings, we're really focused on the three key messages that are our strategy moving into the year. 

  (01:42): 

  So first and foremost is how Roku is a high-reach consistent driver, right? So we're basically taking the 76 million households that we have and making that available for advertisers to purchase. 

  James Kotecki (01:55): 

  Yeah. 

  Kristina Shepard (01:55): 

  Number two is that we're building content experiences that can be seen as programming that's leading consumers into the programming. 

  James Kotecki (02:03): 

  Oh, okay. 

  Kristina Shepard (02:03): 

  And then third, it's that we're taking all the data and tech that all of our advertisers have known and loved about us, so our automatic content recognition, our tech stack, and then basically allowing that to turn all of the reach that we're providing into performance and driving business outcomes. 

  James Kotecki (02:19): 

  I want to drill down on number two of those things. So you're saying that you're creating content that doesn't maybe necessarily feel as much like advertising, but can be used as such? Tell me more about that. 

  Kristina Shepard (02:27): 

  Yeah, so it's been really exciting for us because we have the bird's-eye view and the data to see what are consumers watching on the platform, right? What is the content consumption in one category versus another? What are consumers searching for? 

  James Kotecki (02:40): 

  Yeah. 

  Kristina Shepard (02:40): 

  And so we've taken all of those learnings to understand that food is a top trending content category in streaming on Roku. So we launched on November 30th in Q4 a really awesome new content destination called All Things Food. 

  James Kotecki (02:54): 

  Mm-hmm. 

  Kristina Shepard (02:54): 

  And so it's essentially taking all food content up from out of the apps into one curated content experience. And what's really fun about it is it's not just your traditional recipe content or cooking show competitions, it's actually shoulder content too. So it's Julie & Julia, it's Ratatouille. It's allowing for a really immersive experience that when a consumer goes in it, they can kind of experience food more broadly. 

  James Kotecki (03:19): 

  So I'm sitting at home in my living room, I open up Roku, there's Netflix, there's Hulu, there's Disney Plus, and there also next to that is a Roku kind of food hub. 

  Kristina Shepard (03:28): 

  Yes. 

  James Kotecki (03:28): 

  And I open that up and inside are all these different shows, and when I click on any given show, it takes me to whatever app that that show is in. 

  Kristina Shepard (03:28): 

  Exactly. 

  James Kotecki (03:28): 

  Okay. 

  Kristina Shepard (03:34): 

  So I mean, on streaming, one of the biggest opportunities that we're making an opportunity but has been a challenge is content curation and content discovery. So we're finding on average that consumers are spending about 11 minutes finding what they want to watch. 

  (03:47): 

  So us pulling it out of the app, putting it, to your point, right next to all the other tiles that they know and are used to seeing and clicking into, we're making that content available one to two clicks away from power on versus seven to eight. And what was really exciting about All Things Food is that we launched it with Coca-Cola. 

  James Kotecki (04:03): 

  Mm-hmm. 

  Kristina Shepard (04:03): 

  So they came to us during their iconic Q4 campaign where they have their beautiful holiday creative, and they were able to interweave within the content experience, had an amazing execution that you could click into and actually partner with DoorDash and sell product. 

  James Kotecki (04:03): 

  It's all connected. 

  Kristina Shepard (04:17): 

  So again, it's all connected. 

  James Kotecki (04:20): 

  And just for context, when I'm in Roku, when I click on Netflix, you can see what I'm watching inside of Netflix, you can still get that data? Is that [inaudible 00:04:29]? 

  Kristina Shepard (04:28): 

  So we see the platform-wide, right? So we'll see if you're searching for Stranger Things, we'll- 

  James Kotecki (04:29): 

  But you see the searches, yeah. 

  Kristina Shepard (04:33): 

  We'll understand that you're in Netflix for a certain amount of... Right? We understand kind of broadly the platform-wide data, yeah. 

  James Kotecki (04:39): 

  That makes sense. And so Roku has an original channel, right? 

  Kristina Shepard (04:44): 

  Right. We have The Roku Channel. 

  James Kotecki (04:46): 

  There's Roku Originals. Yeah. 

  Kristina Shepard (04:47): 

  Yes, yes. 

  James Kotecki (04:48): 

  And so is that part of the strategy here as well in terms of what you're able to solve? 

  Kristina Shepard (04:50): 

  Absolutely. It's interesting, because we both have a channel and we are a platform, which makes us unique and all OEMs kind of have their own version of, but the Roku Channel is a top three truly ad-supported channel on the platform. And Nielsen Gauge, we have high reach. 

  (05:03): 

  So it's interesting, because the channel is almost a discovery vehicle in and of itself because it has VOD, it has original programming, it has licensed programming, it has premium subs and then FAST. So it becomes this immersive experience in and of itself that we can bring advertisers into as well. 

  James Kotecki (05:17): 

  And what was the top hit from 2023? I don't want to put you on the spot. 

  Kristina Shepard (05:21): 

  Right. I mean, Weird is actually really exciting for us. 

  James Kotecki (05:23): 

  I was hoping you would say that. 

  Kristina Shepard (05:24): 

  Yes. Okay. Are you a big fan? 

  James Kotecki (05:26): 

  It was the Weird Al movie. 

  Kristina Shepard (05:26): 

  Yeah. 

  James Kotecki (05:26): 

  Yes. I was hoping you would say that. 

  Kristina Shepard (05:26): 

  And that just won an Emmy last week, so really, really timely- 

  James Kotecki (05:29): 

  I kind of teed you up [inaudible 00:05:29]. 

  Kristina Shepard (05:29): 

  You sure did. I love that. But that was a really, I would say, watershed moment for our original programming, is to put a movie out there and to get the accolades and the awards alongside it. 

  James Kotecki (05:37): 

  We absolutely watched it, we loved it. And congratulations on your success there. And to Weird Al, [inaudible 00:05:42]. And Daniel Radcliffe, if they're were watching, I guess. 

  Kristina Shepard (05:44): 

  Yes. 

  James Kotecki (05:45): 

  So how do you think about where the consumer's head is at as we go into 2024? Are there things that you are still grappling with or trying to get ahead of in terms of their sentiments about having so many different things to choose from, about whether or not they want to choose an ad-supported platform, about how much money I'm spending on all these different things? Where do you see it all going? 

  Kristina Shepard (06:04): 

  I mean, streaming is such a dynamic, interesting space because we're kind of at the halftime of streaming where people have been dabbling in testing and then eventually cutting the cord. 

  (06:12): 

  And when we think about it, it's very intuitive that the traditional TV experience is so different than a streaming experience. 

  James Kotecki (06:12): 

  Yeah. 

  Kristina Shepard (06:18): 

  It is dynamic, it is immersive, it's engageable. And so it's interesting, consumers came to streaming with the promise of a better ad experience, lighter ad loads, more relevant ads, because there's targeting and logged in consumer relationships. 

  (06:30): 

  And so now when we're thinking about how do we kind of take that to the next level, it's adding more engageable interactivity across the platform. 40% of Gen Z-ers say they want to engage with their TV screen. And that's an opportunity that the advertising community can really buy into because right now, predominantly they're taking their linear spot and they're putting it into in-stream video and the channels they know and love, but there's so much more that they can do by taking advantage of the full experience. 

  James Kotecki (06:56): 

  Hey, you said halftime, that's a sports metaphor. And speaking of sports, what is Roku thinking about in offering advertisers in the world of sports? 

  Kristina Shepard (07:02): 

  Yeah. So the sports, as we all know, is a very competitive marketplace and rights are very expensive. And so the way that we've come about it- 

  James Kotecki (07:03): 

  People really want it. 

  Kristina Shepard (07:11): 

  But people really love it. 

  James Kotecki (07:12): 

  Yeah. 

  Kristina Shepard (07:12): 

  So we've come about it from a different perspective, is we've found that people predominantly right now with the fragmentation of sports rights, the average consumer does not understand where to watch the game, right? Whatever the game being, right? 

  James Kotecki (07:12): 

  Yeah, I'm guilty of that. Yeah. 

  Kristina Shepard (07:25): 

  So we launched this past year a sports destination, which is a curation of all different shoulder content as well as it'll show all live games for different sporting events and then exactly to where you can watch them so you can be deep-linked in. 

  (07:38): 

  And so we're also partnering with the leagues themselves. So the NFL, we basically launched an NFL zone, which if you were to turn on your Roku right now you'd see Verizon sponsoring it with their messaging. But that provides an amazing consumer experience because it's curating and telling them where to watch it, which is filling a big consumer need. 

  James Kotecki (07:54): 

  Yeah. I want to get into shoppable TV for a minute as well as we're just touching on all these different important trends here. I know that Roku, you launched something in 2022, I believe. So what was that that you launched? What have you learned since then and where are you going in terms of people being able to see an ad and shop it from that ad? In other words, I'm seeing an ad, I like that dress, I click the thing and I get the dress. 

  Kristina Shepard (08:15): 

  Right. Right. The dream of shoppability. 

  James Kotecki (08:15): 

  Yeah. Yeah. 

  Kristina Shepard (08:17): 

  So we partner with Walmart in 2022. And what's really interesting about that partnership is so they are actually the backend fulfillment of our shoppable ads on the TV screen, that partnered with the fact that we have Roku Pay as our pay infrastructure and foundation. So when you sign up for Roku, you're putting in your credit card and your email, so we know all that information about you- 

  James Kotecki (08:35): 

  And that allows me to then get all the other apps that I want. That's already doing that. 

  Kristina Shepard (08:39): 

  So you want to sign up for a certain app and it's all right there with one click of a button. So what we do is leverage that payment system so that you can shop in the experience directly from an ad. 

  (08:48): 

  So you're seeing a video creative, you see an overlay that says, "Shop." Click to learn more and you'd be brought into this immersive microsite all powered by Walmart. And then when you want to purchase the product you, say, click okay with your remote, and immediately that product's going to come to your house within the days or what have you. 

  (09:03): 

  So that's kind of making a less frictionless experience for viewers to be able to get and learn to how to shop on their TV, which is a completely new consumer habit that we're building. 

  James Kotecki (09:14): 

  And have you found that habit to be easy or hard or medium to train people on in order to do that? 

  Kristina Shepard (09:18): 

  Yeah. We have to do a lot of learning. I think when you were to ask people like, "Have you shopped on your TV screen?" And you just actually said it, but a lot of people say, "No." And you're like, "Well, wait, have you signed up for Netflix on your TV screen? Have you rented a movie on your TV screen?" And then they say yes. 

  (09:33): 

  And so there is that consumer behavior to some degree, but we're retraining how to buy a product. So we've learned, we've tested QR codes, we've tested click to mobile, and what we found is a couple of things, the creative matters. So having creative where someone is breaking the actors, breaking the fourth wall, telling the consumer to pick up the remote and click to learn more. And then we've also learned that the remote itself drives conversions. So we work with Liquid I.V., found that 10X conversions came from the remote versus any other form of shoppability. 

  James Kotecki (10:04): 

  I'm sitting there, I need some liquid refreshment. Just let me- 

  Kristina Shepard (10:07): 

  Tomorrow maybe. After- 

  James Kotecki (10:08): 

  Just let me click that button- 

  Kristina Shepard (10:08): 

  After four days in Vegas. 

  James Kotecki (10:09): 

  ... and get my sweet... Exactly. I might need some of that. Final question, what is your favorite building in the iconic background of Roku, which is Roku City, which is all these different sci-fi and kind of cool branding [inaudible 00:10:20]. 

  Kristina Shepard (10:20): 

  Yeah. Well, as we were riffing, you said yours was Big Ben. 

  James Kotecki (10:22): 

  I like Big Ben. It's a classic choice, I think. Yeah. 

  Kristina Shepard (10:24): 

  Love that. So we launched Roku City and it has huge fandom. 

  James Kotecki (10:27): 

  Now, was that launched on kind of a whim or was that really an intentional thing to make an iconic Roku thing? 

  Kristina Shepard (10:32): 

  I think it was both. I think we knew that we had all of these Easter eggs. We could be entertainment, we could do it in a fun way. Many people don't turn off their TV, and so that becomes the largest art installation in their home in some cases. 

  (10:44): 

  And so we created that. It's taken on a life of its own. It's gone viral. Every one in two minutes someone's tweeting about Roku City, they want to date in Roku City, move to Roku City. So we invited brands in. We were having conversations this time last year to invite them in. 

  (10:56): 

  So all of that said, we launched with the McDonald's, they wanted to celebrate Grimace's birthday. Love that. Didn't know that was a thing. But I would say that with McDonald's coming to us as such an iconic brand wanting to celebrate Grimace, we've now seen more and more brands take flight. 

  (11:10): 

  So I would say long story short that the Disney Cinderella castle has to be my favorite. It just makes my 6-year-old self go into Disney World for the first time. Very happy. But for a brand like Disney to come to Roku and turn Cinderella's Castle purple to celebrate their centennial is a huge, huge deal, right? 

  James Kotecki (11:28): 

  Everybody wants to move to Roku City, even Cinderella, I think we've learned today. 

  Kristina Shepard (11:31): 

  Yes, exactly. 

  James Kotecki (11:31): 

  That's an exciting thing. So congratulations on all your success, Kristina Shepard of Roku. We hope to have you back and talk more. 

  Kristina Shepard (11:37): 

  Thank you so much, James. 

  James Kotecki (11:39): 

  Well, I hope you enjoyed that conversation from CES 2024. That's our show for now, but there's always more tech to talk about. Hit that YouTube subscribe button, leave a comment, follow us on Spotify, Apple Podcasts, iHeartMedia, or wherever you're getting this show. And get more CES at ces.tech. That's C-E-S dot T-E-C-H. I'm James Kotecki talking tech on CES Tech Talk.