S15 E11: How TV is Working for DTC Brands (with Jeff Katz, Head of Emerging Sales at Roku)

0:00Nik:Welcome back to Limited Supply, the podcast where we get deep into the tactical and strategic side of e-commerce, digital marketing, and building consumer brands. I'm your host, Nik Sharma. I've spent the last nine years building, scaling, and investing in brands. And through this show and my weekly newsletter at nik.co slash email, I'm here to share everything I've learned. The wins, the losses, the experiments, the tactics, and the insights, all so you can unlock your next$100 ,000 in revenue. Today's episode is a good one, but before we dive in, let me tell you about our chosen sponsor for this week's episode.

0:34Nik:If you're a Shopify brand, pay attention. Roku Ads Manager is built for growth marketers and makes connected TV way easier to test. Go to advertising.roku.com slash limited supply. All right, Jeff, welcome to Limited Supply. Excited to have you here. Yeah, I'm excited to be here. Thanks for having me, Nick. we don't normally get the business side of the platforms that we work with. So it's always fun to get somebody like you on and help break down what's actually happening at the companies that we hear marketing in our space and trying to talk to the marketers. So I'm excited to dive into that.

1:13Nik:Before we jump in, can you give us just a quick background on yourself? Kind of like how would your mom brag about you at a dinner party this weekend? Well, it depends how long your podcast is, because my mom is quite proud of me. Well, I'll try and I'll try and limit this. But I think it's interesting for me to be here and being on with the D2C guy, because most of my career I've spent primarily on the enterprise side and working with the largest media companies and holding companies in the world, really big brands like in the automotive space, restaurant space. And I feel like I've sold pretty much everything in our industry with the exception of print and won't bring up print because I don't know if that's necessarily the most relevant sell moving forward, but have been on the broadcast side, cable side, worked for Snap.

2:00So got a lot of experience on the mobile and audience first side. And then I joined Roku about seven years ago. So I guess if my mom was to brag about me and to give a plug for Roku, I now lead ads manager sales, which is our self-serve platform for the largest streaming company in North America. So it's been quite an experience and really partnering with more performance oriented brands that are looking for real time results versus, you know, on the broadcast side back in the day. It was a ton of fun selling for NBC Sports and quite an experience. but it was sort of like, hey, here's our 32nd spot, throw it up on Sunday Night Football and we'll talk to you next week over drinks.

2:39So I've kind of experienced the full evolution of the media industry and hopefully my mom's proud of me with where I'm at right now with Roku.

2:49Nik:Yeah, and what, so like all, you mentioned you sold all different ad formats, maybe except print. So like, what were some of those formats? What were your favorites? What were the ones where you were like, wow, these are the most effective or these were actually the least effective? What's some of the tea there? Because we never hear about the real stories of ad tech, you know? Oh, yeah. Well, it depends how long, like I said, how long the pod is or when we meet in person, maybe off the record. But I started selling national radio and I was hired as an account executive at 22, which is a bit rare in our industry.

3:20You typically come up through like the sales assistant and sales planner route. And I happened to be hired as an AE at a company called Westwood One that essentially had all of the best rights in media just happened to be on national radio. So things like Sunday Night Football, Monday Night Football, Super Bowl, Olympics, they would basically syndicate this programming across stations throughout the US. So you could be listening to video music awards content in the mid 2000s on your station in New York, just at the same time I would hear it in Chicago and someone else would hear it in LA. And it was truly a great experience because you're selling premium properties, but it's not necessarily the easiest sell in the world.

3:58and then from there went to the Big Ten Network and I was telling your producer before you joined that I grew up in the area of Big Big Ten fans so the opportunity to move to broadcast and cable and sponsorship sell sales side of it and I think that's really you really where you learn like the value of passion and fandom and while certainly performance metrics or certain you know standard media metrics like CPMs are important you know sometimes aligning your brand with a passion fan base can truly move the needle, which I think I witnessed there. From there, went to NBC Sports, which was similar, selling the best properties in the world, things like the Olympics.

4:34And remember being in a Super Bowl party and shutting up all my friends because I sold an ad in the Super Bowl, which was sort of like a career milestone for me. I would say that was an interesting experience because television has gotten so much more measurable in the last 10 years. Whereas back then, not to say if something worked or didn't work, because I don't want to disparage companies that I worked at previously. But I think, you know, as you've seen with the evolution in media, just the accountability towards every one of your dollars and even things like the Super Bowl is really felt now.

5:04And I don't think that was necessarily the case, you know, 10 or so years ago. So from there, I made a pretty hard pivot to Snapchat. And I know that you've written about Snap in a favorable way, not only in LinkedIn, but also in your newsletter. I still think Snap is a bit overlooked in terms of just the valuable audience that they have as well as just the captive audience. And so there I definitely learned what ad tech meant, learned more about measurement. Certainly a location-based app was really critical to really round out my experience and also just the true performance nature of Snap, which I think ultimately led me to Roku, which is sort of a combination of everything I've done in the past.

5:41We used to say that Roku is the beauty of television and the brains of digital. And I still think that's the case today, just the ability to tell your story on the television screen, but then also have the measurability and outcomes-based oriented nature of what you want to get on search and social. And so I won't say what did work and didn't work. I'll just say that I've been fortunate to sell just about everything. And even during my time at Roku, we had a DSP at one point. So just the omni-channel nature of a DSP and the importance of data integrations. I've been crazy fortunate to work not only for some great companies and work for some great leaders, but just sell a bunch of different things over the last 20 years or so.

6:22Amazing.

6:22Nik:And, you know, I also came up in the ad tech world, which is a funny parallel. And ad tech is what ended up driving me toward more e-com related stuff, because I thought most of the ad tech you grew up in, or not grew up in, but like you were working in, was a lot more legit. The stuff I was doing was like programmatic advertising at some ad tech company in San Francisco that I thought was like the next big tech company. And all their stuff was so fraudulent because it was like basically CPM arbitrage of units and, you know, like 120 day view through attribution windows where it's like somebody's going to buy the thing at some point.

7:04Right. Yeah. Attribution is all till death, basically.

7:08Nik:Yeah, exactly. But that's what ended up driving me toward more toward the paid social and search world where even though it was this like black box, you know, there was more, it felt like there was more control over like what you were doing. But all this, all the media stuff you sold was like direct result premium stuff. Like it was the inventory. It wasn't like any of the programmatic stuff, which is cool. But all that said, can you explain to the, to the common person in direct consumer who has no idea how some maybe exchanges work, DMPs work, DSPs, SSPs, like what is a DSP and how does that play in this world of ad tech?

7:45Nik:Because I think also the framing and the understanding of how DSPs play or what they even are will help people understand how, you know, Roku as a whole also works. Yeah, no, that's a great question. And I will say, while I was fortunate to sell for some premium, you know, publishers and companies, I still felt like we were the underdog in a lot of those places, like being at Snap when, you know, Instagram released stories, you're like, wait a second, are we even gonna have a business, you know, now that they're taking on, you know, our most important products. So I feel fortunate from that standpoint, because I think having a bit of that underdog mentality, which we also have at Roku, which I can touch a bit more upon.

8:24But I think what's amazing about sort of the ad space and ad tech world is the benefit of a DSP is just that omni-channel approach where, you know, if you see an ad on a television screen to sort of start the purchase journey, we know that ultimately, like even clicking with your Roku remote or whatever your television operating system might be, realistically, you're not going to make as many purchases with your remote as you are with a mobile device. And so can you start that journey as a brand to tell your story on the television screen, but then ultimately retarget those people via DSP to do things like manage holistic reach and frequency so that if I know that Nick might be a high value customer, help me find more Nick so that I can reach him at scale, but also ensure I'm not reaching too many times.

9:11Because I think one of the most frustrating things we've all experienced, not only as consumers, but also on the brand side is like, if somebody already bought those shoes, why am I continuing to serve them a shoe ad? Like we experienced that a lot in our own personal day-to-day. So the ability to exclude audiences that have made purchases or more importantly, finding additional customers and then balancing that frequency. Because the last thing we want is to continue getting the same ad over and over again, which especially in the streaming space has improved a ton over the years, just with frequency management and better targeting and other measurement capabilities.

9:44So the benefit of a DSP is also, I think what's really critical is telling your story in the right way based on the environment where it's showing up. How I want to see an ad or how I view an ad on a television screen versus a mobile device versus programmatic web really differs. And so going back to my experience at Snap, we introduced vertical video. Back then, vertical video was foreign to creative agencies or to brands. Now, obviously, it's commonplace here as we sit here 10 years now from when Snap and others were introduced. So I think that the DSP space is super interesting. I think it's going through quite a bit of challenges just based on some of the fees and the level of transparency.

10:23And so that being said, if you're a major brand that has the ability to spend hundreds of millions of dollars in advertising, it obviously might make sense to activate that way so that you're able to bring in your first party audience or find new customers.

10:36Nik:Yeah. I feel like it's almost like plugging into ad networks or exchanges kind of like through an API basically. Yeah. Yeah. And we're standing up a bunch of API integrations to our self-serve platform via ads manager. Really? Just making the inventory more accessible through the buying methods that customers are used to. And then also just the ability to integrate things like reporting and conversions APIs. That's honestly one of the things I'm most excited about is being a part of Roku is that you talk so much on your podcast, which I love about building D2C brands and how you can do things like test different types of creative.

11:16I think historically television has been really challenging to do so because you either buy on a direct IO with a firm commitment. It's hundreds of thousands of dollars. You're using a major creative agency that's producing, you know, 30 second spots or 60 second spots. And I think we're not the only ones. There's others in the self-serve CTV space where, you know, the minimums and point of entry is rather inexpensive and you can actually iterate and test creatives. And I feel like that's one of the biggest benefits of search and social is that, you know, there's this theory with television that you have to produce these films if you talk to these creative agencies when at the end of the day, they're, you know, 15, 30 or 60 second spots.

11:54I think one of the most exciting developments in CTV, and we're at the forefront of that, is that let me test my creative because there's no minimums to do things like self-serve platforms. Let me see, you know, did these drive certain metrics like site conversions or lead gen or ultimately ROAS, where those metrics previously in television didn't really exist. It was primarily like third-party measurement tied to brand awareness and upper funnel metrics. And now we have the ability to measure a last click. That's not to say that television is necessarily going to deliver last click, but I think from a view through perspective, it's a really powerful medium.

12:28Nik:Yeah. And also like, you know, one thing people don't mention is when you have last click, you have a much better reference point to understand the view through conversions as well on top of that. And you can kind of assign a score there. um on the the api note one random funny thought came to mind do you are you are you plugged into the whole open claw claw bot uh molt bot situation going on yeah it's funny i i was i was listening you talk a little bit about that too we're not currently um but what's super i just mean you as like a individual oh an individual yeah i use claw i mean i'll just say like there are definitely certain benefits.

13:10Like, you know, I'm fortunate to lead a sales team here. And I'm definitely relying on AI as far as, you know, I want to develop, you know, team focus and team principles for 2026. And these are a few of the things that I have in mind. I think I'm, I think my mother would brag about my writing capabilities, but certainly AI can do it a heck of a lot better

13:29Nik:than I can. Yeah. But I think there's a lot of things that obviously are going to drive efficiencies moving forward. And I'm not as quite, quite as plugged in as I'd like, but I think our team is definitely utilizing a lot of AI tools that we've developed specifically at Roku to make our sales motion more efficient. Yeah, well, one thing I'm hearing from brands that are, I'm talking like two,$300 million plus brands, is they're now starting to develop their own ad ops platforms, They're just coding them with AI. And because you have API keys, like that's all these platforms need is you just plug in the APIs of any of the platforms they're using to upload ads to.

14:09Nik:And they're able to like rapidly generate creative, throw it out, test it, get the results and see what they end up scaling or not scaling. But the entire process just fully automated. Yeah, I mean, it's crazy. I think there was obviously a lot of press around the Coca-Cola ad over the holidays that was produced by like the consumer sentiment. That was weird though. That was like such a bad execution of AI. That was like AI four years ago. Right, right. But I think we actually work with a couple of companies that are modifying search and social creative for CTV because we have a lot of customers that want to test the platform, get into television, find new audiences, ideally drive incrementality from their existing tactics.

14:54But again, so much of the barrier entry has been like, I don't have a 30 second spot to put on the television screen. And I think we're going to see more and more ads on our TV screens that look similar to what they look like in our TikTok feed. They just might be a little bit longer and, you know, talking to camera, text involved. And so, again, we're not the only ones. So I don't want to make this only about Roku, but I think giving brands the ability to buy on television that previously they weren't able to do in the past and creative has been a barrier to entry. And to your point, not only ourselves, but we're leaning into AI companies and AI tools to democratize the actual creative generation process.

15:28And to your point, you should be able to do the same things you do on television that you do with those other platforms. Like, why are you just setting and forgetting a 30 second spot that your big creative agency developed when you can do something that's more real time that could potentially capitalize on, you know, creative that's benefiting you in other platforms. And does that work on TV or does it not work? And I have to test something else. So I think that's a really exciting development because, you know, previously, like I mentioned, you know, you produce a couple spots and then you run it for the duration of your campaign and then you're done with it.

15:58Nik:Yeah, I think like when I talk to brands today, most of them are basically leveraging their e-commerce photo shoot, video shoot as their content to then go and craft a TV commercial. Like they'll grab a bunch of, you know, primary video and a bunch of B-roll. Maybe they merge some stills in. Now you can sort of animate stills as well. and then just adding text overlays with some music. You know, you basically got a full commercial there and a voiceover too, you know, basically a full commercial. And that's cool. I think your thing is cool too, where like you could put a social ad in the platform and then it spits out a TV ready ad as well.

16:42Nik:And it also like, it doesn't make it feel unnatural either. Like, you know, when you see it on TV, it feels like a totally natural ad. there was these years where TV creative was very uniform. It was like, oh, if it's TV, it has to be this level. And then it started to, you know, there was a lot of just experimenting. And now it's like you have random as seen on TV stuff. You have very polished stuff. You have only motion graphics, which at this point can just be done, you know, by a brand using AI. You've got like YouTubers jumping on and holding a camera in front of them talking to you. Like there's just all these different formats.

17:15Yeah, I think it's exciting too, because it should feel different, you know, like it doesn't have to be the 30 after 30 after 30 or 60s and 90s with all the with all the pharma brands running. And, you know, so what's so powerful about the brands that you've worked with, or the company that you've stood up is that some of these brands that we were on our feet or on our wrists, or that we're utilizing in our homes, like we had no idea what these companies were a few years ago. And then suddenly, because of the success they found on, you know, places like TikTok or Instagram, or I even point back to like the Allbirds example, they built their business on Instagram.

17:53We're obviously hoping to do the same for television. I think it's going to be a little bit different ultimately, because again, you know, the odds of you buying a pair of shoes on your television screen versus within your Instagram feed are probably not quite as high. But I think where we're seeing some success, which is interesting, is more like high value purchases, like things that require a little bit more consideration like booking a trip or a mattress or we're doing really well with furniture companies. But I think what's so powerful about search and social is that based on the level of data they have, it's like that shows up in your feed because they know you just went on a ski trip, which is what happened to me recently.

18:29Nik:Yeah, no, 100%. I think like TV is always such a natural next step after they figure out what works on a social and search standpoint and like find that product market fit because that sales cycle is already extremely hard to track on search and social. Like you can't really get, you know, you have to basically just run incrementality level measurement to really understand like, is this channel even working? But with TV, it sort of helps accelerate that process. And I've even worked with a mattress company in the past where TV was something that did accelerate their path to purchase because it just legitimized the brand a lot more as well.

19:10Nik:How do you like, how do you kind of pitch TV to brands that are basically scaling on, on social and search? And, you know, they're like, well, TV, you know, social and search is like, we, we see the dollars right there. Right. I'd love for your perspective as far as like, you know, what these brands think about television or even how you position it to them. You know, it's, to me, it's interesting because like I said, my, my career historically has been the inverse. It's like, we're going to start with TV, we want to get our brand on the screen, we want to tell our story, then we want to retarget them with search and social or, you know, it's a television first strategy.

19:46And I think, as we all know, at this point, you got to have an omni-channel strategy once you hit a certain threshold. And I would say for us, like the biggest value, not only for Roku, but also television in general, is that incrementality. Like at some point, you're probably going to scale or hit your scale on those search social platforms or the auction could become more challenging in terms of finding your audience because there's density there or there's similar products that are trying to do the same thing that you are. And so I think a lot of the conversations that we're having is the ability to tell your story on the biggest screen of the home.

20:19You know, the mobile viewing experience is typically done one-to-one, whereas with television, as we know, there's a lot of co-viewing because you're sitting around with multiple people. I think the benefit is that you're not getting lost and the algorithm of a YouTube or a meta, for example. And of course, those businesses are incredible. So no shade towards them. But I think the opportunity to really stand out in front of your audience and present your brand in a 30-second format or 15s or whatever you decide to do so versus if I don't show up in your feed, I might not find you. But I think the other benefit is that we do have the capabilities from a targeting perspective with Roku, having 100 million active accounts and half of all streaming households utilizing Roku, we have such robust audiences that we can scale, whether it's a local customer or we work with a company that wants to reach household income of 500K plus and we can scale that audience too.

21:13So I think a lot of it starts with incrementality and ultimately just some level of education that we're not gonna have the same CAC or CPA that you're gonna find on search and social. But if you look at the view through attribution or to your point earlier, how these platforms can play with one another. Like your television experience can help boost ultimately, you know, your cost per acquisition or ROAS that you're finding through other channels. And so I think there's been a fair amount of education. And frankly, I find a ton of fun. Like I've been with Roku, as I mentioned, over seven years.

21:46And so much of our role back then was just educating people on streaming. And now we're past that point because, you know, the amount of time spent streaming actually surpasses broadcasting cable. And if you stripped out sports, the numbers would be even that much more disproportionate towards streaming. And so I think the benefit we have is like people understand streaming, they do it themselves. Now it's okay, why is streaming valuable or CTV valuable to you in addition to the channels that you're accustomed to utilizing already? Yeah, totally.

22:14Nik:You mentioned a couple interesting things like I would have never thought about, like multiple people sitting around the screen versus one-to-one viewing. And there was something you mentioned right before that too. Oh, getting lost in the algorithm. Another interesting one too. Shopify brands, this is the one. Roku Ads Manager lets you connect directly to your Shopify store and run streaming TV campaigns that can drive action, not just awareness. Roku's positioned this as a big differentiator. Shoppable TV through action ads and their Shopify integration. If you want top of funnel on the big screen with a proper path to purchase, go to advertising.roku.com slash limited supply.