Marina Conquest
July 31, 2025
19
minutes read
Television advertising just got personal. While traditional TV shoots commercials into living rooms hoping the right people are watching, connected TV advertising knows exactly who's on the couch—and what they want to see. This precision targeting, combined with the immersive power of the big screen, explains why global CTV ad spending will hit $46.3 billion in 2026.
The living room has gone digital, and advertisers are following viewers there. Connected TV advertising represents the convergence of television's visual impact with digital marketing's surgical precision. No longer do brands need to accept the waste and guesswork of traditional TV buys. Today's CTV campaigns can target specific households based on viewing habits, shopping behavior, and demographic data while measuring results in real time.
Why does this shift matter? Just look at the numbers. In 2024, 233.9 million Americans watched CTV content, with the average adult spending over two hours daily streaming on their television screens. More telling: 2023 marked the first year cord-cutting households outnumbered pay TV subscribers. For marketers, this migration creates both an opportunity and an imperative.
CTV advertising delivers what traditional television never could: accountability. Brands can track viewer engagement, measure conversions across devices, and adjust campaigns on the fly. A furniture store can target only households within their service area who recently searched for sofas. A software company can reach decision-makers at Fortune 500 companies during their evening Netflix sessions. This granular control, paired with completion rates exceeding 90%, makes connected TV ads a powerful tool for businesses of all sizes.
Connected TV (CTV) refers to any television set that connects to the internet and streams digital video content. Think of it as the bridge between traditional television and the streaming world: maintaining the lean-back viewing experience of TV while adding the targeting capabilities of digital media.
Smart TVs with built-in internet connectivity qualify as CTV, as do regular televisions connected through external streaming devices like Roku, Apple TV, or gaming consoles. The key distinction lies in the internet connection that enables viewers to access streaming services and, crucially for advertisers, allows for data collection and targeted ad delivery.
💡 For a comprehensive overview of the technical aspects, Google's CTV guide provides additional insights into how these systems operate.
CTV advertising delivers targeted video ads to viewers through internet-connected television devices while they stream content. Unlike traditional broadcast commercials that play to whoever happens to be watching, connected TV ads can be customized based on household data, viewing patterns, and even cross-device behavior.
👉 For instance, two neighbors watching the same show at the same time might see completely different commercials—one for a luxury car, the other for a local pizza shop—based on their respective profiles and interests.
The process works through dynamic ad insertion, where streaming platforms and apps serve different ads to different households in real-time. Advertisers purchase this inventory either programmatically through automated bidding systems or directly from publishers like Hulu or Peacock.
What makes connected television advertising particularly powerful is its marriage of television's emotional impact with digital's measurement capabilities. Advertisers know not just how many households saw their ad, but can track subsequent actions like website visits or purchases.
Connected TV has the best features of online and offline, it is a powerful hybrid for brands that make the best strategic use of this channel and in the near future it will be the greatest digital hub in homes around the world. — Joel Cox, Co-Founder, Strategus
These terms often create confusion, but the distinctions are straightforward once you understand the hierarchy:
💡 For a deeper dive into how these platforms compare, check out our guide on OTT vs CTV: Key Differences, Similarities, and What They Mean for Your Marketing Strategy in 2025.
The connected TV ecosystem runs on several types of hardware:
CTV advertising operates through a sophisticated ecosystem that dynamically matches ads with viewers in real-time. When someone streams content on their connected TV, multiple systems communicate within milliseconds to determine which ad to show. The streaming app sends a request containing anonymous household information to ad servers, which then auction the opportunity to show an ad. The winning advertiser's video plays during the commercial break, and performance data flows back for analysis and optimization.
This process happens thousands of times per second across millions of households. The technology stack involves demand-side platforms (DSPs) where advertisers manage campaigns, supply-side platforms (SSPs) that publishers use to sell inventory, and data management platforms (DMPs) that organize audience information.
💡Sounds complicated? Don’t go it alone—CTV success takes know-how. The right partners turn complexity into measurable wins.
Programmatic buying automates the purchase and placement of CTV ads through real-time bidding systems. Instead of negotiating rates manually with each publisher, advertisers use DSPs to set parameters—target audience, budget, frequency caps, and performance goals. The platform then bids on available inventory across multiple streaming services simultaneously.
The process unfolds in under 100 milliseconds. A viewer clicks play, triggering an ad request that hits the programmatic marketplace where algorithms evaluate whether this viewer matches target criteria. The highest bidder wins and their ad plays.
In 2025, an estimated 75% of all connected TV advertising transactions occur programmatically, democratizing television advertising while improving results for advertisers of all sizes.
Connected TV ads come in several formats:
The targeting precision in connected television advertising surpasses anything possible with traditional TV:
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Measuring connected TV advertising performance requires rethinking traditional TV metrics while embracing digital attribution capabilities.
The convergence of television's emotional impact with digital's precision targeting creates unique advantages for advertisers. Connected TV advertising delivers measurable results while maintaining the prestige and engagement of traditional TV.
CTV advertising turns the spray-and-pray approach of traditional TV into a precision instrument. Where linear TV might reach 60% waste, connected TV campaigns regularly achieve 80-90% on-target delivery.
👉 One analysis of a diaper brand's advertising spend on linear TV estimated that approximately $60 million out of a $75 million campaign was wasted on households that do not purchase diapers.
Advertisers can build custom audiences by combining demographic, psychographic, and behavioral attributes.
First-party data integration takes targeting further—brands upload customer lists to create lookalike audiences or retarget existing customers. This CRM-level targeting on the TV screen creates powerful opportunities for upselling and cross-selling.
Connected TV ads achieve 90%+ completion rates on average, compared to YouTube's 31% for skippable ads. This captive audience translates into exceptional engagement—brand recall averages 46% (as compared to 9% for website ads).
The full-screen, sound-on environment commands attention in ways smaller screens cannot match. Unlike interruption-based mobile ads, connected television advertising fits naturally into the viewing experience.
Modern identity resolution technology links the living room TV to smartphones, tablets, and laptops in the same household. This connection enables closed-loop measurement previously impossible with traditional television.
👉 Consider a typical customer journey: A viewer spots a CTV ad for vacation deals on Sunday night. By Wednesday, they’ve booked a trip, hopping from TV to work computer to tablet to smartphone. Traditional TV would miss this journey. CTV tracks every step.
Conversion tracking extends beyond digital actions:
Rather than giving all credit to the last click, these models recognize how connected TV ads build awareness and consideration that other channels later convert.
Connected television advertising brings programmatic efficiency to the big screen:
CTV ads run in premium, brand-safe environments, not next to random or risky content. Major streaming platforms and networks vet all programming, while walled-garden CTV apps and strict approval processes keep out fraud.
Industry standards like app-ads.txt and advanced fraud detection add extra layers of protection. The result? CTV fraud rates stay below 11%, far safer than most digital channels.
CTV offers major advantages, but marketers must overcome some real challenges to maximize performance.
The CTV landscape resembles a complex puzzle with pieces that don't quite fit together:
The walled garden problem compounds these issues. Major platforms guard their user data closely, preventing the holistic audience view that advertisers expect from digital channels.
It is really the lack of cross-platform, cross-programmer, cross-publisher measurement. We're not just talking about stitching together linear and CTV and linear and digital, but this is how, as a buyer, I need to understand the ecosystem as a whole. — Mariel Estrada, Head of Video Currency, Omnicom Media Group
Ad repetition is a top CTV viewer complaint, thanks to platform fragmentation and lack of unified identity management.
The same household can be bombarded with the same ad across multiple services, far exceeding optimal frequency (3–7 exposures/week). Too many repeats hurt brand perception and efficiency.
While some advertisers try single-platform exclusives or identity resolution tools, true universal frequency capping remains a work in progress.
While CTV's closed ecosystem offers more protection than the open web, sophisticated fraudsters have found ways to exploit vulnerabilities. The high CPMs of connected TV ads (often $25-65 per thousand impressions) create lucrative targets for criminal operations.
Techniques like SSAI spoofing and device spoofing let bad actors generate fake CTV impressions—tricking advertisers into paying premium prices for ads that never reach real viewers.
The fragmented CTV landscape makes detection difficult, as fraud can slip through smaller platforms even if larger ones have strong defenses.
Industry standards like ads.cert 2.0 and advanced fraud detection tools are making progress, but fraudsters constantly adapt.
The connected TV advertising landscape continues rapid evolution. According to Statista's latest projections, U.S. CTV ad revenues will reach $42.4 billion by 2027, representing growth that outpaces every other digital advertising channel.
Television commercials no longer end when the video stops playing. Interactive CTV ads create two-way conversations between brands and viewers, breaking the passive viewing paradigm that defined television for decades.
Early adopters report longer engagement and higher conversion rates, especially among digital-first audiences who expect instant shopping experiences.
From a performance and creative perspective, when you leverage advanced creative formats (in CTV), interactive creative performs much better than standard creative or just repurposing a broadcast spot in that connected space... We're seeing 192 seconds of additional time earned. — Dan Mouradian, VP-Global Client Solutions, Innovid
AI is transforming CTV advertising by predicting which viewers will respond to specific messages, significantly improving campaign efficiency:
With advanced AI tools such as a conversational planning assistant and dynamic KPI optimization, platforms like Elevate make media planning faster, cross-platform optimization smarter, and campaign analytics simple and actionable, ensuring maximum efficiency and ease of use.
👉 Discover how AI is reshaping CTV and learn how to get ahead—read “The Rise of AI in CTV.”
Connected TV ads have evolved from pure branding to real performance drivers. In 2025, over half of CTV advertisers prioritize sales, store visits, and leads over awareness, thanks to better measurement and proven results.
Direct-to-consumer brands report higher conversions and customer value from CTV, while pixels and attribution models link TV exposure to digital actions—showing CTV-exposed households convert 45% higher than others.
To maximize performance, marketers use shorter, CTA-focused ads, strong offers, and post-TV retargeting, blending digital tactics with TV’s reach.
Having a full-funnel mindset is paramount—not only measurement but your channel strategy. CTV drives users down the funnel, and they will convert via other channels. There's no other way to see if your CTV campaign is working or not. — Gijsbert Pols, Ph.D., Director of Connected TV and New Channels, Adjust
Geographic precision in CTV makes TV advertising affordable for local businesses. A plumber can target just local households, while restaurants customize ads by region—all at the ZIP code level.
Success stories abound:
By eliminating wasted impressions, CTV slashes local business acquisition costs by 40% versus traditional TV.
User-friendly tools and real-time dashboards further empower small advertisers, breaking down barriers that once kept TV out of reach.
Success in connected TV advertising requires adapting traditional TV wisdom to digital realities while avoiding common pitfalls. These proven strategies help advertisers maximize their CTV investments.
Clarity on success metrics shapes every campaign decision. Establish primary and secondary KPIs aligned with business objectives. Smart KPIs account for CTV's assist effect by tracking influenced conversions with 7-14 day view-through windows.
Layer multiple data sources for precise audience identification:
CTV advertising multiplies impact when integrated with other channels. Use television to build awareness, then deploy digital channels to capture interest.
Cross-device retargeting capitalizes on CTV's awareness-building power—just 7% of ad spend on CTV delivered a 30% boost in ROI, according to one study.
Optimizing for the TV screen means adapting creative to its unique environment:
Launching your first connected TV campaign means making smart choices on platforms, budgets, and measurement. Here’s a roadmap:
Your platform choice impacts inventory, targeting, and measurement. There are three main options:
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Experts suggest allocating 15–30% of your digital budget to CTV for statistically meaningful results, with $25,000–50,000/month enabling solid tests.
CPMs range $15–65 depending on targeting and content quality, significantly higher than display or social media, but the premium is offset by 90%+ completion rates and a premium, engaged viewing environment.
When planning distribution, avoid concentrating spend on a single publisher. Instead, allocate 40-50% to major platforms like Roku or Amazon, 30-40% to broadcaster apps (Paramount+, Peacock, etc.), and 10-20% for testing emerging platforms. This diversification helps maximize reach while identifying the most efficient inventory sources.
Use pacing strategies—steady distribution, flighting for key periods, or dayparting to peak viewing hours (7–11 PM)—to maximize impact.
Reserve 10–15% of your spend for testing creatives, audiences, and platforms to find what works.
Measurement turns CTV into a data-driven investment. Set up pixels and control groups before launch for accurate tracking. Go beyond last-click attribution—use view-through windows (7–14 days) and multi-touch models to capture CTV’s full impact. Track metrics like reach, completion rate, conversions, attributed revenue, and incremental lift. Weekly and monthly reviews help optimize and balance short- and long-term goals.
CTV delivers what traditional TV can’t: 90%+ completion rates, laser-focused targeting, cross-device tracking, and automated optimization. Local businesses can finally afford TV ads. Marketers can prove ROI. Personalization is now possible at scale. No wonder 75% of CTV buys are programmatic and most advertisers focus on more than just awareness.
Still, CTV isn’t plug-and-play. Platform fragmentation, frequency issues, and ad fraud require smart planning and strong partners.
But the winners aren't waiting for CTV to get cleaner. They know that first-mover advantage beats perfect execution every time. While everyone else is paralyzed by analysis, they're making bold moves and claiming territory.
Want to steal a page from their CTV playbook? Start with these five moves:
CTV isn’t waiting, so why are you? Slide into our inbox at AI Digital and we’ll help you catch up fast.
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Inefficiency
Description
Use case
Description of use case
Examples of companies using AI
Ease of implementation
Impact
Audience segmentation and insights
Identify and categorize audience groups based on behaviors, preferences, and characteristics
Automated ad campaigns
Automate ad creation, placement, and optimization across various platforms
Brand sentiment tracking
Monitor and analyze public opinion about a brand across multiple channels in real time
Campaign strategy optimization
Analyze data to predict optimal campaign approaches, channels, and timing
Content strategy
Generate content ideas, predict performance, and optimize distribution strategies
Personalization strategy development
Create tailored messaging and experiences for consumers at scale
CTV refers to ads delivered to internet-connected TVs during streaming content, combining television's premium viewing experience with digital advertising's targeting precision.
OTT (Over-the-Top) is video content streamed over the internet to any device. CTV (Connected TV) is a subset of OTT, specifically referring to content viewed on television screens.
Costs vary based on targeting, platform, and inventory quality. CTV is generally more cost-effective than traditional TV because it reduces ad waste through specific audience targeting. Pricing is often based on CPM or CPCV models.
You need to use a demand-side platform (DSP) or an ad platform that offers CTV inventory. Many platforms are designed to be user-friendly, similar to paid search or social media marketing platforms.
A wide range of businesses, from large national brands to small and medium-sized businesses and local companies, can benefit. Precise targeting makes CTV effective for both broad reach and niche marketing.
Performance depends on campaign goals. CTV offers a premium, lean-back viewing experience on large screens with very high completion rates, excellent for brand building. YouTube offers massive reach across all devices with different user behavior contexts. Many strategies effectively use both.
Yes. The accessibility of programmatic platforms and flexible budgeting options have made CTV advertising viable for small businesses looking to compete for audience attention on the biggest screen in the house.
