The U.S. advertising market is on an upswing, with forecasts predicting a 5% growth in 2023, (excluding political ads), and an even stronger surge in 2024 due to the election cycle.

Roku, a leader in the streaming industry, stands to gain significantly from this trend as advertisers increasingly allocate more budget towards digital platforms vs. traditional cable.

The consumer searches charted below clearly demonstrate why this shift is happening – advertisers are chasing eyeballs.

Roku offers a range of content from various providers through its Roku Channel, and it also sells streaming hardware. This dual role places Roku in a unique position to benefit from ad spend.

LikeFolio data suggests the company is already reaping the benefits.

Roku mentions have grown by +24% on a YoY basis.

In the 3rd quarter, the streaming giant not only posted a surprise core profit but also projected higher-than-expected quarterly revenue, sending its shares soaring by about 30%.

This positive trend is not isolated to Roku; Disney’s ad-supported Disney+ products grew by approximately 2 million subscriptions in Q4 to a total of 5.2 million, according to its most recent report that sent shares soaring. More than 50% of Disney’s Q4 new U.S. subscribers chose an ad-supported Disney+ product and over the past six months, these AVOD subs spent 34% more time watching the service.

Similarly, Roku's success is amplified its strategic push toward original content on its streaming channel, which attracts both subscribers and advertisers.

LikeFolio data shows Roku Channel mentions up +6% on a YoY basis.

The upcoming election cycle adds another layer of potential growth for Roku, as political ad spending traditionally surges during these periods.

In fact, ad spending for the 2024 election cycle is expected to top $10 billion – and streaming is certainly a target here.

With its advanced targeting and analytics capabilities, Roku is well-positioned to capture a significant portion of this spending.

As traditional TV continues to grapple with existential threats, Roku's platform offers a compelling alternative for investors who want to play a rebounding ad market higher.