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For decades, TV ads dominated marketing. It shaped culture, created icons, and drove consumer trends. But with streaming and connected TV (CTV) redefining how we watch, prime-time slots are no longer the gold standard. So, what is connected TV advertising?
CTV advertising delivers targeted ads to viewers through streaming platforms, offering new ways for brands to connect with audiences. How can brands make the most of it? With the help of our experts, we’ll break it down for you.
Challenges of Linear TV Advertising
Linear TV advertising does offer a broad reach that allows marketers to connect with millions of viewers at once; however, this approach lacks precision. Ads are shown to all viewers of a program, regardless of demographics or interests, with the result being inefficient targeting and less-than-ideal campaign performance, even for the best video ads.
As consumer habits evolve, more viewers are abandoning traditional cable and satellite subscriptions. Here are some key statistics:
- Between 2015 and 2021, U.S. subscription rates fell from 76% to 56%.
- By 2026, 75% of households in the U.S. will have cut the cord on traditional TV.
- Linear TV ad spending, which totaled $68.35 billion in 2022, is projected to drop to $64.94 billion by 2026.
This shift has rendered traditional TV advertising strategies increasingly obsolete, pushing advertisers toward Connected TV (CTV) platforms like Netflix, Disney+, and Hulu. These streaming platforms deliver on-demand content alongside TV ads during shows or movies — often at a lower cost than cable, while offering improved audience targeting options.
Benefits of Connected TV (CTV) Advertising
In 2026, global CTV ad spending is projected to hit $38 billion, demonstrating the sector’s increasing dominance in the advertising industry. This rise is fueled by several key benefits that CTV offers over traditional TV advertising:
- Precision targeting
- Better campaign optimization
- Localized advertising for relevance
- Improved video completion rates
- Advanced performance analytics
1. Precision Targeting
Unlike linear TV’s broad demographic targeting, CTV allows for precise audience segmentation. Advertisers have a wealth of data at their fingertips, including income, education, consumer behaviors, and specific interests, to target audiences with greater accuracy.
Additionally, by incorporating first-party data, brands can retarget existing customers or build lookalike audiences — groups of users who share similar characteristics, behaviors, or interests with their customer base. This is a better approach to video marketing than traditional TV, which is forced to rely on generic age and gender categories.
2. Better Campaign Optimization
On traditional TV, ads are fixed once scheduled, but CTV allows for real-time campaign adjustments. This flexibility enables marketers to make mid-campaign tweaks, like adjusting ad creatives, targeting specific demographics more effectively, or optimizing the timing.
Continuously refining campaigns based on live data allows advertisers to increase engagement, maximize performance, and ensure they meet their campaign goals more efficiently.
3. Localized Advertising for Relevance
CTVs can pinpoint viewers' locations via IP addresses to allow for hyper-localized advertising, where the messaging can be tailored to specific geographic regions. This level of targeting makes ads so much more relevant for viewers, thereby increasing their impact.
For small businesses, this precision is particularly valuable as they can run highly focused campaigns that speak directly to a local audience. This cost-effective strategy minimizes wasted ad spend and provides more opportunities for conversion.
4. Improved Video Completion Rates
Since CTV ads are more relevant, they tend to see higher engagement compared to traditional TV, with viewers more likely to watch them through to completion. Real-time data through Automatic Content Recognition (ACR) allows advertisers to track video completion rates with a high rate of accuracy. This offers insights into which ads resonate with viewers.
5. Advanced Performance Analytics
CTV offers better attribution and conversion tracking, with the ability to link ad views to website visits or in-store purchases. This data helps marketers measure the effectiveness of their campaigns, providing clearer insights into ROI and overall performance.
By leveraging tools like footfall attribution, advertisers can track whether a viewer visits a physical store after viewing a TV ad, creating a direct connection between digital exposure and offline actions.
How To Get Started With CTV Advertising
CTV advertising displays ads to viewers as they stream content on their TVs or other connected devices. These ads are typically served programmatically through automated auction systems, but there’s more to CTV. To develop an effective CTV strategy, follow these key steps:
- Define your goals
- Choose an advertising platform
- Select your ad type and start production
- Determine your target audience and launch the campaign
- Track and optimize performance
1. Define Your Goals
Before launching any campaign, define your objectives. Consider these questions:
- Who is your target audience?
- What action do you want your viewers to take?
- How does your CTV strategy integrate with other marketing efforts?
- What tools or platforms do you need to execute the campaign?
2. Choose an Advertising Platform
CTV offers several different platforms and methods for ad buying and selling, including:
- Partnering up with Smart TV manufacturers (Samsung, VIZIO)
- Via Streaming sticks (Amazon Fire, Roku)
- Services like Peacock and Hulu.
- Demand-side providers like Nexxen and Madhive
You must also decide on the method of purchasing ad slots (something the top TV advertising companies can help you with, such as:
- Direct sales: Buying ad spots directly from streaming platforms (e.g., Netflix, Hulu).
- Private marketplaces (PMP): Invite-only ad marketplaces where publishers set prices and control inventory.
- Programmatic guaranteed advertising: Pre-negotiated deals for a specific number of ad impressions at a fixed price, similar to traditional TV ad buying.
3. Select Your Ad Type and Start Production
The most common ad lengths are 15–30 seconds, though shorter 6-second ads can also be effective. Shorter ads often work well for creating brand recognition or reinforcing key points in a concise manner.
Consider using interactive features like QR codes or direct-response tools, like clickable banners or calls to action, to make it easier for viewers to act immediately.
4. Determine Your Target Audience and Launch the Campaign
Use both first-party data (e.g., from loyalty programs or CRM systems) and third-party data (e.g., behavioral data from ad networks or data providers) to create detailed audience segments. This lets you tailor your messaging to specific demographics, interests, and even behaviors, which ensures greater relevance and engagement.
Plus, leveraging data from multiple sources allows for more precise targeting that improves the effectiveness of your ads.
5. Track and Optimize Ad Performance
CTV allows for more than just top-of-funnel metrics like awareness. You can track:
- Site attribution and conversion
- Foot traffic and location-based attribution
- Online and offline sales lifts
Additionally, real-time optimization lets you adjust your campaign during flight, reallocating budgets to improve performance.
Connected TV Advertising: The Future of TV
As traditional TV viewership continues to decline, expect more people to turn to streaming platforms. For viewers, it means greater flexibility and the freedom to choose what, when, and how they watch. For advertisers, CTV provides a more targeted and adaptable advertising environment.
With the ability to create highly customized campaigns, reach specific audiences, and track performance in real-time, CTV is quickly becoming the future of television advertising. It’s a win-win situation: consumers enjoy a more personalized experience, while brands benefit from more effective and measurable advertising opportunities.
Our team ranks agencies worldwide to help you find a qualified partner. Visit our Agency Directory for the best TV advertising agencies, as well as:
Our experts also recognize the most innovative projects across the globe. Given the recent uptick in video podcasting, you'll want to visit our Awards section for the best & latest in video production.
Connected TV Advertising FAQs
1. Do local brands benefit from CTV?
Yes. Instead of relying on local cable or public access, local brands can now launch precisely targeted ads for streaming audiences. This enables more refined local targeting than traditional TV or radio, which helps brands reach the right viewers based on specific demographics and behaviors.
CTV ads also integrate seamlessly with a brand's broader digital marketing strategy. This enhances consistency across platforms and provides a more cohesive approach to local marketing efforts.
2. Will traditional TV become obsolete?
Traditional TV viewership has been steadily declining for years. While millions still tune into linear programming, a growing number of viewers are turning to the flexibility and convenience of streaming services. This change reflects broader changes in consumer behavior as more people prioritize on-demand content over scheduled broadcasts.
3. How does traditional advertising compare to CTV?
Typically, CTV advertising allows more precise targeting and audience segmentation. Also, it will ensure better conversion tracking. Traditional linear advertising tends to be rigid, while the digitized nature of CTV allows brands and advertisers to make larger and smaller tweaks in their campaigns to maximize performance.
