What is CTV Advertising and Why Does It Matter?
What if you could combine the power of television with the precision of digital marketing? That’s exactly what CTV advertising offers.
As streaming services become the new norm, advertisers are shifting their focus from traditional TV to Connected TV (CTV). But what is CTV advertising, and why is it quickly becoming one of the most effective marketing channels in the digital age?
Let’s break it down and explore how CTV advertising works, its major advantages, potential drawbacks, and why now might be the perfect time to invest in this growing space.
What is CTV Advertising?
CTV advertising refers to digital ads served on Connected TV devices—Smart TVs, gaming consoles, streaming sticks like Roku or Fire Stick, and set-top boxes. These ads appear while users stream content from platforms such as Netflix, Hulu, Amazon Prime Video, Disney+, and HBO Max.
Unlike traditional broadcast TV ads that reach wide but generic audiences, CTV ads are targeted, trackable, and often non-skippable, giving advertisers more control and better ROI.
According to eMarketer, US adults watch CTV for 2 hours and 15 minutes per day, on average. In addition, they are expected to spend 20% of their daily media time wacthing CTV by 2026. Hence, businesses have found a great marketing niche to dive in.
Netflix, Amazon Prime, and Disney+ are the top platforms in terms of revenue and reach since they provide advertisers with unmatched chances to reach large audiences. Futhermore, Hulu, Peacock, and Apple TV+ draw audiences of 25 to 50 million, offering lucrative advertising options, while Max and Paramount+ fetch substantial viewership.
Why is CTV Advertising Growing So Fast?
It might seem ironic – why advertise on platforms people pay for to avoid ads? But here’s the shift:
- Ad-supported tiers are on the rise. Netflix, Disney+, and others now offer lower-cost plans with ads to attract budget-conscious subscribers.
- Viewer time is exploding. According to eMarketer, U.S. adults now spend over 2 hours per day watching CTV, and by 2026, CTV will account for 20% of their total daily media time.
- Advertisers follow the audience. With cord-cutting accelerating, marketers see CTV as the natural evolution of TV advertising—only smarter.
Big platforms like Netflix, Amazon Prime Video, and Disney+ lead in both reach and revenue, but other players like Hulu, Peacock, Apple TV+, Max, and Paramount+ offer niche opportunities with 25–50 million active users each.
Advantages of CTV Advertising
1. Advanced Targeting Capabilities
Unlike traditional TV advertising that targets large demographics, CTV ads use data-driven targeting to reach the right audience at the right time. As a marketer, you should divide consumers according to:
- User behavior (watch history, app usage)
- Demographics (age, gender, household income)
- Geo-location (local targeting by ZIP or region)
- Device type (Smart TVs vs. streaming sticks vs. consoles)
CTV’s advanced targeting capabilities are the result of collaborations between streaming platforms and retail media networks, which provide access to important first-party data. Unlike social media, which experiences signal loss, CTV retains high data-driven precision.
Hence, you may enhance your targeting based on lifestyle, buying behaviour, and viewing patterns by combining first and third-party data. As a result, you will obtain increased engagement, less ad waste, and better ad effectiveness.
Result: Reduced ad waste, better targeting, and higher engagement—especially when combining CTV with other programmatic channels.
2. Higher Engagement & Completion Rates
Because of how viewers interact with TV programming, CTV advertising achieves high video completion rates. Unlike other digital platforms where commercials can be skipped or ignored, CTV ads are usually non-skippable, ensuring that brands get their whole message across.
This immersive, full-screen format keeps viewers engaged, as CTV is frequently consumed in a relaxed, “lean-back” environment with long-form content. Brands benefit from better recall and deeper engagement because there are fewer ads competing for attention than on the web or social media.
Plus, with interactive CTV formats (clickable CTAs, QR codes, etc.), these ads can drive direct response, bringing viewers closer to action, something linear TV simply can’t do. This moves consumers closer to the bottom of the sales funnel, giving advertisers a great tool for driving action.
Think of a family watching a movie in Netflix on a Sunday. If an ad about some new toys suddenly pops up, they have no more choice than to watch it. Hence, if the ad is engaging enough, you’ll most likely catch the kids’ attention. Finally, if you include an appealing CTA, the parents will know where to go if they want to buy your toys to their kids.
3. Measurable & Data-Driven
One of the most significant advantages of CTV advertising over traditional TV is its ability to give real-time data without the need for detailed performance reports. You can access detailed data in real time to assess campaign impact and make adjustments if needed.
However, what does CTV exactly track?:
- Impressions and view-through rates – Determine how many people watched your ad.
- Engagement metrics – Track click-through rates for interactive ads.
- Attribution tracking – Connect ad views to website visits and purchases.
This kind of tracking will help you as a marketer to optimize campaigns in real-time, making data-driven decisions that enhance performance and maximize ROI.
4. Cost-Efficiency with Programmatic Buying
CTV advertising is changing the way marketers reach their consumers by providing a more cost-effective and targeted alternative to traditional TV adverts. This involves:
- Lower CPM (Cost Per Mille) – CTV advertising are more cost-effective than traditional TV, making them accessible to businesses with limited budgets.
- Automated efficiency – Programmatic buying improves ad placement, resulting in improved optimization and reach.
- Precision targeting – Unlike broad TV audiences, CTV guarantees adverts reach only targeted users, reducing wasted money.
Previously, TV advertising was a privilege reserved for large corporations with vast resources. However, CTV levels the game by letting firms to pay based on impressions or completed views. This results in cost-effective exposure, a great advantage for small businesses.
If you invest in CTV advertising, you will have acces to several networks and channels. This gives you the opportunity of broadening your reach without breaking the bank. For organisations trying to maximise their marketing ROI, CTV provides a more intelligent, adaptable approach to video advertising.
Example: Instead of spending $500,000 on a primetime TV spot, a growing brand can spend a fraction of that on a CTV campaign and reach the same (or better) audience—with data to back it up.
Challenges of CTV Advertising
1. Fragmentation across platforms
The proliferation of streaming services such as Netflix, Hulu, Disney+, and Amazon Prime, as well as devices like Roku, Fire Stick, and Apple TV, has resulted in a fragmented environment. The lack of uniform ad formats and measurement standards may make it difficult for you as an advertiser. Basically, you will find it troublesome to conduct campaigns and reach your target audience efficiently as a result of this.
2. Ad Fraud & Viewability Issues
Ad fraud is a growing threat in CTV advertising. As digital advertising grows, fraudulent tactics such as device spoofing become increasingly widespread. Furthermore, issues such as buffering, ad-blocking, and skipping can prevent ads from being fully watched, worsening the situation. CTV, like all other forms of digital advertising, is prone to issues like fraudulent impressions and click fraud. As a result, you should be alert and watch out for any thread to your ads.
3. Frequency & Viewer Experience Issues
In the world of CTV advertising, overexposure – showing the same ad too many times – can reduce campaign efficacy. A Conviva study discovered that ad frequency is the most common complaint among streaming users, emphasizing the need for greater control over how frequently adverts show.
Thus, if you want to keep your viewers engaged, it’s important to manage overall frequency. In addition, you must ensure that commercials aren’t shown back-to-back or in the same ad pod.
Finding the perfect mix can mean the difference between a successful campaign and one that fails to engage people.
Solution: Set frequency caps. Rotate creatives. Monitor per-user exposure across all platforms.
CTV Advertising: YES or NO?
Now, after having reading this list, it’s time to weigh every pro and con that come with CTV advertising. Although it still has some challenges to overcome, CTV advertising isn’t a bad way to promote your brand at all.
Take into account that advertisers always follow the audience. As more and more people are migrating to streaming platforms, marketers have to do the same. And in spite of still being a growing market, CTV advertising on streaming platforms can be labeled as “the future of advertising”. So, it is your turn to take a leap and start engaging viewers with your ads.
While it comes with some growing pains, the benefits of CTV advertising: targeting, engagement, measurement, and cost-efficiency, far outweigh the challenges.
Whether you’re a brand looking to scale or a startup aiming for smarter media buys, CTV is no longer “next”, it’s now.
Ready to Launch Your First CTV Campaign?
Interested in CTV advertising but you don’t know where to start? At Impress Video, we specialise in high-impact CTV video content and strategy. Whether you’re new to the space or want to level up your existing campaigns, our team can help you:
- Develop engaging, performance-driven CTV ads
- Choose the right platforms and placements
- Maximise your budget with expert targeting and optimization