Gone are the days of gathering around the TV, eagerly waiting for your favorite show to begin — even sitting through multiple commercial breaks to avoid missing a single moment. Streaming is now king, with Netflix, YouTube TV, Disney+, Prime Video, and more all offering subscribers on-demand access to their favorite movies and TV shows, anytime and anywhere they log in.
Given the convenience of streaming, it’s little wonder that it now accounts for the largest share of total TV usage at 47.5%, with broadcast (21.4%) and cable (20.2%) coming in at a distant second and third.
But where does that leave advertisers? In a pretty sweet spot, actually.
While you may not have the luxury of a captive audience, the streaming era has given advertisers more ways to reach their ideal buyers through what’s known as connected TV (CTV) advertising. Let’s talk more about what CTV advertising is, and what it means for your organization.
What Is Connected TV?
Connected TV (CTV) is television that acts like the internet.
Rather than tune into a channel, where they’re beholden to a set schedule, viewers can open a streaming device (such as Roku, Fire TV, Apple TV, Chromecast, or even a gaming console), select what they want to watch, and stream it on demand over an internet connection. While the experience feels similar to watching traditional TV, the underlying technology is dramatically different. You can even use CTV to listen to music or browse online — a far cry from the limitations of cable or broadcast television.
As television viewing has moved to CTV, advertising budgets have followed. Linear TV, or traditional broadcasting, was built for an era when viewers watched the same programs at the same time, which concentrated their attention on a small set of programs and channels. Streaming distributes that attention, giving viewers the freedom to choose what they want to watch and when, which makes audiences more fragmented. This shift has made it harder for advertisers to reach a broad audience with a single buy, instead forcing them to focus on reaching the right audience across multiple platforms.
That’s where CTV advertising comes in.
What Is Connected TV Advertising?
CTV advertising is what it sounds like: video ads shown within streaming content on CTV. CTV ads are nearly identical to commercials shown on linear TV, with full-screen video that plays during a natural downbeat in a show, movie, or live stream.
The primary differences between CTV advertising and advertising on linear TV are the setup and the distribution. With linear TV, advertisers buy into a schedule, choosing from a network, a program, and a set of time slots. That ad is then broadcast to everyone watching that program at the same time.
It’s pretty easy to see the flaws in this system. Advertisers have limited control over who sees their commercial, which means it may only reach a small percentage of their target audience, making for a potentially dismal return. And we all know commercial breaks are the perfect time to get off the couch and grab a snack or hit the bathroom, which means viewers might miss the ad altogether.
CTV advertising works differently.
When a viewer opens a streaming app on their smart TV or other device, whatever they choose to watch is then delivered over the internet as a stream. If that content is ad-supported, the stream will include designated ad breaks. When playback reaches an ad break, the app triggers a request to fill that slot, at which point the system selects which ad to display.
Ads are selected one of two ways:
- With direct buying, the publisher has an existing deal with a specific advertiser, so the system automatically plays an ad from that brand. Direct buying gives advertisers complete control over ad placement and timing and is best suited for brands with larger budgets.
- With programmatic buying, advertisers have the opportunity to bid on the slot. The system then chooses a winner, based on the advertiser’s bid and whether their targeting rules match the viewer and the content, and seamlessly inserts the winning ad into the slot. Programmatic buying offers lower minimum spends and real-time campaign adjustments, which makes it well-suited to performance-focus campaigns and brands with smaller budgets.
That match is what gives CTV advertising a leg up over advertising on linear TV. Instead of paying for a broad audience you can’t really qualify, you’re paying for impressions that are far more likely to land with your target audience in a context that makes sense for your message. And the more targeted your messaging, the more likely viewers are to engage with it — or, at the least, not pick up their phones and start scrolling in the middle of the break.
What’s Behind the Shift to CTV Advertising?
There are numerous factors behind the shift to CTV advertising, some of which include:
- Changes in viewing habits: As we’ve mentioned, streaming is now the default way many people watch TV, and advertisers are chasing attention where it actually is. Barring a few exceptions — the Stranger Things series finale racked up over 105 million views in a single week — viewers don’t cluster around a handful of primetime shows the way they did decades ago. Instead, they choose what to watch and when to watch it. This structural change forces advertisers to think strategically about environments where audiences have agency, rather than passively consume whatever’s on TV at that moment.
- Changes in viewing experiences: It isn’t just that viewers have made the jump to streaming, but that they have different ways of interacting with the content they consume. Nearly 70% of viewers engage in “second-screen behavior,” such as scrolling on their phone while watching TV. Advertisers are responding by experimenting with interactive formats and cross-device techniques to turn that behavior into an advantage rather than a distraction.
- Ad-supported streaming is the norm: A prevailing myth about streaming is that it’s all subscription-based and ad-free, but that’s not true. Nielsen reports that 72% of total TV viewing time in the U.S. is supported by ads, and a large portion of that viewing happens through streaming platforms. This means the scale of reachable audiences in streaming environments has reached parity with linear TV, but with more flexible ways to deliver and measure ads.
- Budgets follow measurable outcomes: The growth in CTV ad spend reflects both audience reach and a desire for more accountable media investments. Industry analysts predicted that CTV ad spending would exceed $33 billion in the U.S. alone by 2025, which put CTV advertising well on track to overtake linear TV ad spend by the end of the decade.
Based on these figures, two things are clear:- Advertisers now treat CTV as part of core video planning, with audience-based tools replacing pure program schedules.
- Measurement expectations are rising. Unlike linear TV, where outcomes often rely on ratings and delayed reporting, advertisers can track CTV ads with impression-level logs and device signals. That doesn’t make measurement perfect, but it does make it more actionable, which adds confidence to spend decisions.
- Linear TV is on the back foot: As streaming gains ground, the traditional TV base continues to erode. Cable and broadcast no longer command the majority of viewer time, as evidenced by subscriber losses and shrinking audience share.
Linear TV isn’t going to vanish overnight. After all, it still has a foothold with certain demographics and remains popular for major events. But this does mean advertisers can no longer justify spending large portions of budget on a delivery system that undervalues where audiences actually spend their time and offers less direct tracking of who saw what and what happened next.
CTV vs. OTT Advertising: What’s the Difference?
You’ll often hear the acronym “OTT” mentioned in conversations about CTV advertising, where it’s sometimes used interchangeably with CTV. The only problem with that is that OTT, which stands for “over-the-top,” and CTV aren’t the same thing. They’re separate but related concepts.
Similar to CTV, OTT refers to video content delivered over the internet instead of via cable, satellite, or broadcast. However, OTT is a delivery method, not a screen type. OTT advertising includes ads shown within streaming content across TVs, phones, tablets, laptops, and sometimes gaming consoles. CTV advertising is a subset of OTT advertising limited to streaming on a television screen. That’s why people mix them up: Every CTV ad is OTT, but not every OTT ad is CTV. Following?
Where CTV and OTT overlap is the streaming ecosystem itself — apps, ad-supported streaming inventory, direct vs. programmatic buying, and so on. The main difference is where people are watching. CTV ads are watched on a TV, usually in a living room, so advertisers tend to think in terms of a household watching together. Since OTT ads also appear on phones, laptops, and other mobile devices, the viewing experience tends to be more personal, and viewers can directly interact with the ads they’re shown.
| CTV Ads | OTT Ads | |
| Where it runs | Streaming apps on TV screens | Streaming apps on TV plus mobile, tablet, desktop, and console |
| Viewer behavior | Laid-back, shared household, longer sessions | Mixed of laid-back and on-the-go, individual viewing, shorter sessions |
| Targeting Signals | Household/device signals, app context, geolocation data, publisher segments | Same as CTV, plus more frequent user-level signals on web/mobile |
| Tracking & Measurement | Impression and completion logs at device or household level, platform reporting, cross-device attribution often modeled or matched | Similar streaming logs and tighter user-level tracking and click-based paths (on web/mobile) |
| Interactivity | Limited but growing (QR codes, remote-based prompts, shoppable formats on some platforms) | Generally higher on mobile/desktop (clicks, taps, app installs, interactive units) |
| Ad Creative | 15–30 second videos with TV-like storytelling; strong first seconds and branding | Wider range (5–30+ seconds), can skew shorter on mobile; can support more direct-response formats |
| Typical Pricing | Often higher cost per thousand (CPM) due to premium full-screen TV context and high completion rates | Wide range, including CTV pricing and lower-cost mobile/desktop OTT inventory |
| Benefits | TV impact with streaming delivery, strong audience attention when relevance is right, high completion | Broader reach across screens, more opportunities for interactive and click-based outcomes |
| Drawbacks | Frequency fragmentation across apps, inconsistent reporting across platforms, limited direct click signals | Greater variability in quality by device and placement, mixed attention levels on smaller screens |
CTV Advertising: What to Know Before You Get Started
In addition to standard in-stream video ads, many CTV interfaces now offer placements that show up while viewers are browsing titles or when they pause for a quick break, which creates new ways to earn attention on the biggest screen in the home.
Some common CTV ad formats include:
- In-stream ads: Full-screen video that plays before, during, or after streaming content; best for storytelling, broad reach, and consistent delivery
- Pause ads: Static ads that appear when a viewer pauses or idles; best for simple messages, branding, and mid-funnel prompts
- Browse and menu placement ads: Static ads that appear while viewers are choosing what to watch; best for discovery and influence at a decision point, since you’re reaching someone while they’re actively selecting content
- Overlay and companion-style placements: A banner or UI element that can appear alongside content or within an interface; best for reinforcing a message without a full ad break
- Interactive CTV formats: QR-enabled experiences or remote-based prompts; best as a bridge, rather than a replacement, for in-stream video, with the goal of making it easy to continue the journey on a smartphone
Now let’s talk targeting. CTV advertising earns major points for its precision targeting capabilities, which include levers such as:
- Household and location targeting: CTV ads are often targeted at the household level because the TV is typically a shared device. That still allows for meaningful precision, especially with location. Most CTV buys can target by geography such as region, city, or Designated Marketing Area (DMA), and many can go even narrower for local use cases.
- Content and contextual targeting: Advertisers can target based on the viewing environment, including specific apps, types of programming, and content categories. This degree of precision ensures your ads appear in contexts that align with your brand and the mindset you want, which improves relevance even when you can’t identify a specific person.
- Audience segmenting based on viewing behavior: Many CTV ecosystems build audience segments using first-party signals inside their environment, such as what kinds of shows a household watches, what channels they engage with, and how frequently they stream. These aren’t perfect identity segments, but they’re highly effective at reaching likely shoppers at scale.
- First-party audience activation: In some cases, advertisers can use their own data, such as customer lists or site visitors, to reach or exclude certain households. This is where CTV gets closest to true precision targeting because you’re starting from a known relationship. But it isn’t uniform everywhere: Watch rates and reporting vary by platform, and targeting is still tied to a household or device rather than a single person.
- Retargeting and sequential messaging: CTV can also be part of a sequence. You might introduce your brand on a TV screen, then follow up later on other devices, or vary your message over multiple exposures. The key advantage to retargeting is the experience is less random: You’re guiding who sees the ad and in what context, instead of broadcasting a single message to everyone.
How Vital Helps Brands Run High-Performing CTV Campaigns
At Vital, we run CTV campaigns end to end across a range of platforms, using StackAdapt as our most common platform to access premium inventory and the performance reporting brands need to stay accountable.
Here’s what you can expect when you partner with Vital for CTV advertising:
- We make measurement airtight, setting up detailed conversion tracking and placing the right pixels on-site so we can connect ad exposure to real business outcomes. That includes visibility into direct click-through conversions as well as view-through conversions, which is critical with CTV, where viewers often act later, and not on the TV screen itself.
- We build and test audiences designed to balance scale with efficiency. Depending on your goals and available data, that can include first-party targeting using your site and CRM data, lookalike-based targeting to expand beyond your current customer base, third-party segments to reach broader qualified groups, and intent-based targeting to reach people showing relevant purchase signals. The goal is quality over quantity: Put your ads in front of the right households, not just more households.
- We develop CTV creative in-house or collaborate with your team, then launch campaigns with a testing mindset so we can learn quickly and iterate. Throughout the campaign, we optimize and report using the metrics that matter in CTV buying, including impressions delivered, cost per completed view (CPCV), video completion rate (VCR), unique device breakdown, and view-through conversions, alongside the on-site actions those exposures drive. The end result is CTV ads with a clear sight line into performance.
Like what you see? Contact our team today to launch your next campaign.
FAQs
What does CTV mean in advertising?
CTV stands for connected TV. In advertising, CTV refers to streaming video ads delivered on a TV screen using an internet-connected device, such as smart TV or screening stick. Compared to linear TV, where advertisers purchase spots in a traditional broadcast schedule, CTV advertising places ads inside streaming environments where what a viewer watches is delivered over the internet.
What is a CTV ad?
A CTV ad is a video ad that appears within a streaming environment on a TV screen. Most of the time, that means a full-screen spot served during an ad break in an ad-supported show, movie, or live stream. Depending on the platform and environment, CTV ads can also be placements that show up when someone pauses content or browses the menu, which creates additional ways to earn attention outside of a standard ad break.
What are the connected TV platforms?
Connected TV platforms — also known as CTV ad platforms — are often confused for connected TV devices, when they’re two separate things. CTV devices are the hardware and operating systems people use to watch streaming content, such as Roku, Apple TV, or a Fire Stick. You don’t buy ads directly on the device; it’s simply the screen the content plays on.
CTV platforms are the tools advertisers actually use to buy, launch, and manage their campaigns. These demand-side platforms (DSPs) either specialize in CTV or have strong CTV capabilities built in. Popular platforms include StackAdapt, Mountain, and The Trade Desk, alongside walled garden options from the streaming giants themselves, such as Disney and Paramount. A CTV platform is where you set targeting, upload creative assets, manage your budgets, and track performance across streaming inventory, all without having to negotiate individual deals with each publisher.
What are examples of CTV advertising?
The most common example of CTV advertising is an in-stream video ad that plays before, during, or after streaming content. Beyond that, many CTV environments offer pause ads that appear when a view stops playback, browse or menu placement ads shown when someone is choosing what to watch, overlay or companion-style units that reinforce messaging within the interface, and interactive formats that use QR codes or remote prompts to push action to a second screen.
What is the difference between CTV and OTT advertising?
Over-the-top (OTT) refers to streaming video delivered over the internet, regardless of where it’s watched. That includes TVs, phones, tablets, laptops, and even gaming consoles. CTV is narrower in scope, referring only to the TV screen slice of OTT. Put simply, every CTV ad is OTT, but not every OTT ad is CTV.
How much do connected TV ads cost?
Pricing for connected TV ads varies a lot, though they’re most often purchased on a cost per thousand (CPM) basis. Costs vary based on inventory quality, the mix of direct and programmatic buying, audience targeting and data usage, seasonality, and how constrained your targeting is. A helpful way to think about it is that CTV ads tend to command higher CPMs than many digital video placements because they’re full-screen, high-attention inventory, but programmatic buying makes them more accessible without the large minimums associated with traditional TV deals.
Is Netflix OTT or CTV?
Netflix is OTT because it’s a streaming service delivered over the internet. From a viewing standpoint, if someone were to watch Netflix on a TV, it would be considered connected TV viewing.
