What is connected TV advertising? Benefits & how it works

With the rise of streaming services and internet-enabled devices, viewers are increasingly ditching traditional linear TV and watching their favorite shows, movies, and live sports on demand through connected TV (CTV).

According to EMARKETER, CTV ad spend will surpass that of linear TV for the first time by 2028, accounting for 52.1% of the $91.23 billion USD in total TV ad spend that year. Meanwhile, the number of US households with pay TV is expected to drop below 50% before the end of 2026.

With consumers cutting ties with cable and flocking to streaming in droves, CTV has emerged as an ideal channel for advertisers to reach a more engaged target audience.

Whether you’re new to CTV advertising or looking for an in-depth refresher on how it works, here’s everything you need to know about CTV and how to successfully integrate it into your omnichannel advertising campaigns.

What is connected TV?

CTV refers to televisions that connect to the internet, either directly via built-in capabilities or through an external device, allowing viewers to stream live or on-demand video content from the comfort of their home. Examples of CTV include Smart TVs (e.g., Samsung, LG), streaming devices (such as Amazon Fire Stick, Apple TV, Roku, or Chromecast), and gaming consoles (like Xbox and PlayStation).

Unlike traditional linear TV, CTV allows viewers to access a wide range of video content through subscription-based or ad-supported streaming services like Netflix, Disney+, Max, Paramount+, Peacock, and Tubi. This flexibility provides advertisers with opportunities to target highly engaged audiences with more precision.

What is connected TV advertising?

CTV advertising is a form of digital advertising that delivers targeted video ads within streaming content on internet-enabled TVs. 

CTV inventory (aka the available ad space on streaming platforms) primarily involves video ads—similar to traditional commercials—that run before (pre-roll), during (mid-roll), or after (post-roll) programming. CTV ads can also take the form of interactive or non-linear ad formats, such as shoppable ads or dynamic overlays, which appear within or on top of streaming content to increase viewer engagement and conversions (more on that later). 

With its data-driven targeting and more granular measurement, CTV advertising is helping to democratize television advertising. It allows everyone from small businesses (SMBs) to major brands to target audiences through premium channels and high-demand content that were previously inaccessible (like award-winning series, top-rated reality shows, and live events) at a lower cost and with less minimum ad spend than traditional linear TV advertising.

How does CTV advertising work?

CTV advertising leverages automated, data-driven ad purchasing through programmatic buying to target and engage viewers across streaming content. Here’s a simplified look at how the whole process works step-by-step:

Step 1: Content selection and ad placement

It all starts with a viewer selecting something to watch, such as a movie, TV show, or live event, on a CTV device.

At the same time, the streaming platform automatically identifies available ad slots and shares relevant data (such as device type, content genre, and demographic or behavioral characteristics about the viewer) with an ad exchange, which facilitates real-time bidding among advertisers.

Step 2: Programmatic buying and bidding

An advertiser uses a demand-side platform (DSP) to purchase or bid on ad slots from the ad exchange through various types of programmatic deals, such as:

• Open auctions: Public, real-time bidding that’s open to all advertisers.
• Private marketplaces: Invite-only auctions that offer select inventory and more exclusive ad placements.
• Programmatic guaranteed: Fixed-price deals that provide premium ad placements with guaranteed impressions.

These deal structures streamline the ad-buying process by offering advertisers greater efficiency, control, and transparency than traditional linear TV ad buying.

Step 3: Ad delivery

Once an advertiser secures or wins the ad placement, the ad is instantly served and seamlessly integrated into the viewer’s streaming experience, much like traditional TV commercials, but tailored based on the viewer’s profile and interests.

Step 4: Campaign measurement and optimization

From there, advertisers track real-time metrics, including impressions, video completion rates, and conversions (e.g., online purchases tracked via pixels, or store visits measured through cross-channel attribution), which advertisers can analyze immediately to refine targeting strategies and further optimize campaign performance.

What’s the difference between CTV and other TV advertising channels?

Understanding the differences between linear TV advertising and other streaming-based advertising options is essential to crafting the right CTV advertising strategy. Here’s what you need to know. 

OTT vs. CTV advertising

Over-the-top (OTT) refers to video content streamed on any device, like a desktop computer, smartphone, or Smart TV that’s connected to the internet. OTT gets its name because it bypasses traditional linear cable TV by streaming content online.

CTV is a subset of OTT. For example, if viewers watch Disney programming via Disney+ on their mobile device, they’re streaming OTT content. But if they watch it through an external device like a Google Chromecast or Amazon Fire TV Stick plugged into their TV, that would be considered CTV.

OTT advertising refers to any ad delivered directly to viewers over an internet-enabled device (like a computer or tablet), whereas CTV advertising refers to ads specifically targeted to viewers using a CTV device.

Because CTV content is often viewed on larger screens in a more relaxed environment, CTV ads are typically known for having higher ad recall than OTT ads, which are often displayed on smaller mobile and desktop screens.

Traditional linear TV vs. CTV advertising

Linear TV refers to traditional television programming that viewers watch at a scheduled time, typically through an antenna, cable, or satellite subscription.

The main difference between CTV and traditional linear TV advertising is that CTV ads can be played before, during, or after the streaming of on-demand content. In contrast, linear TV ads are delivered live during the commercial breaks of traditional TV programming. 

CTV advertising also gives marketers more precise audience targeting and greater flexibility over how they spend their budgets. Linear TV, on the other hand, is designed to reach a broad audience, but is less precise and more expensive.

With pay TV usage declining and CTV expected to surpass linear TV in ad impressions by 2030, advertisers have a growing opportunity to reach audiences as viewing continues to shift toward streaming.

Addressable TV vs. CTV advertising

Addressable TV allows marketers to deliver  targeted, personalized ads to specific households or audience segments, even if they’re watching the same TV show.

CTV advertising can leverage the targeting capabilities of addressable TV, but addressable TV isn’t limited to just CTV devices. Advertisers can also serve ads through cable, satellite, and internet protocol television delivery systems and set-top boxes.

What are the benefits of Connected TV advertising?

CTV advertising combines the precision of digital advertising with the high-res, high-impact power of traditional linear TV advertising. It allows advertisers to target the right audience at the right time and moment, captivating customers when they’re the most receptive: watching TV in the comfort of their homes.

Here are five of the main benefits of CTV advertising:

1. CTV offers enhanced targeting capabilities

CTV ads are sold as impressions, similar to programmatic video or display ads sold through a DSP. This means you can apply similar strategies using first-party data, third-party segments, and lookalike audiences to target ads based on user behavior, audience demographics, geographic location, and more, reaching the right audiences and wasting less ad spend.

2. CTV can be leveraged for retargeting

CTV ads use pixels or software embedded within an ad or app to capture device information and user behavior when a viewer engages with an ad. Advertisers can leverage this data for cross-device retargeting, allowing them to deliver relevant ads to viewers across devices, such as smartphones and computers—enhancing conversions and brand engagement.

3. CTV provides real-time optimization and measurement

With traditional linear TV ads, you’d often need to wait weeks, if not months, to receive performance reports and know how a campaign performed. With CTV, you can access real-time reporting and metrics like impressions, CPMs, and view-through conversions, making it easier to track campaign performance and optimize them on the fly.

4. CTV enables more holistic campaigns

Research shows that second-screen viewing is becoming more common while watching TV—and it’s not just among young people. New data from Omdia found that 52% of US viewers aged 45–54 now watch video clips on their phones while watching TV. Even 35% of viewers aged 55–64 are now multitasking with mobile video.

Unsurprisingly, this behavior is even more common among Gen Zers and millennials: 63% of 18–24 year-olds reported watching videos on their mobile devices while watching TV, along with 61% of viewers aged 25–34.

Instead of competing for attention, second-screen viewing creates additional opportunities for advertisers to reach specific audiences across their devices. 

Incorporating CTV into your existing multi-channel strategy can help you get better campaign results and increase the likelihood of a conversion by capturing your audience’s attention wherever they are online.

5. CTV has increased viewer engagement

CTV is commonly known to offer higher levels of viewer engagement compared to traditional linear TV ads. CTV ads are often unskippable, broadcast in high-definition formats like 4K and 21:9 widescreen, and provide more interactive ad experiences that encourage interaction. This often leads to higher completion rates and longer viewing times than traditional linear TV ads.

What are some types of CTV ad formats, targeting, and metrics? 

CTV offers the targeting, measurement, and flexible ad formats of digital advertising, giving advertisers real-time insights and the flexibility to create highly-targeted campaigns without losing the benefits of traditional linear TV campaigns.

CTV ad formats

CTV offers advertisers multiple formats to engage viewers effectively across streaming content. Here are some of the most common CTV ad formats advertisers can leverage:

• In-stream ads: Pre-roll, mid-roll, and post-roll video ads play before, during, or after streaming content. Similar to traditional TV ads, these ads usually appear between episodes or scenes of a TV show or movie.
• Non-linear ads: Also known as overlay ads, non-linear ads are static images, text, videos, or animations displayed alongside or on top of content without pausing or interrupting it.
• Companion ads: These ads are served alongside or surrounding content. They often appear as text, images, rich media, or skins. Companion ads provide consistent visibility by surrounding video content without interrupting the TV viewing experience.
• Shoppable ads: An emerging ad format in CTV, shoppable ads allow viewers to directly purchase featured products from within the streaming content itself, typically through clickable product icons, QR codes, or “shop now” buttons that appear as overlays during ads.

CTV measurement

CTV provides the types of granular reporting and measurement that advertisers could never previously access with traditional linear TV campaigns. Here are some CTV metrics that can help you measure the effectiveness of your campaigns:

• Impressions: This metric tracks how many times viewers see your CTV ads, helping you understand the scale and reach of your CTV campaigns.
• Watch time and video completion rate: These metrics measure the average number of seconds viewers watch a CTV ad and how many viewers watch it to the end. They provide insights into how engaging your content is.
• Cost per completed view (CPCV): This metric measures how much of your campaign’s budget is spent on each ad watched by a viewer from start to finish.
• Return on ad spend (ROAS): This metric measures the revenue earned for every dollar spent on CTV advertising, helping you understand the effectiveness and profitability of your CTV campaigns.
• View-through conversions: This metric measures how many viewers converted (for example, made a purchase) after viewing an ad. It gives you a holistic view of how campaigns are performing, helping you measure the true return on advertising spend and providing a baseline to help improve future CTV campaigns.

Additionally, marketers can use footfall attribution to measure how effectively their CTV ads drive customers to visit physical store locations, directly linking online ad exposure to offline activity.

CTV targeting capabilities

CTV provides more precise household targeting than traditional linear TV advertising, allowing advertisers to deliver personalized messages, optimize campaign performance, and reach the right audience more efficiently.

Here are some key targeting methods advertisers can use with their CTV campaigns: 

• First-party targeting: Use data collected through form submissions, in-store visits, previous purchases, and first-party cookies to target households directly using hard data like their IP addresses and device IDs, if a platform provides them.
• Location targeting: Leverage first-party data to target CTV ads to viewers based on their geographic location by country, state, city, or zip/postal code.
• Platform and device targeting: Target specific CTV platforms and devices like Roku, Fire TV, Apple TV, and more.
• Demographic targeting: Leverage first and third-party data to target audiences based on viewer demographics like age, income, and household size.
• Contextual and interest-based targeting: Deliver hyper-relevant ads based on the types of content their viewers consume by targeting specific genres, viewing times, and keywords.
• Lookalike targeting: Find common characteristics shared between existing customers in first- and third-party data and use lookalike targeting to find potential customers who share those similarities. This helps advertisers expand the reach and profitability of their campaigns. 
• Retargeting: Use retargeting to re-engage and convert viewers who have already shown interest in a brand or product—for example, by visiting a website, making a purchase, or watching a CTV ad in full—and serving an ad again in the hopes of a conversion.

Connected TV advertising best practices

Now that we’ve explained the features, benefits, and advantages of CTV advertising, let’s go over some of the best practices, strategies, and tips that can help you get the most out of your CTV campaigns.

1. Use CTV as part of a multi-channel strategy

CTV advertising should act as a complement to your existing multi-channel strategy, not a replacement for it.

Use CTV to retarget potential customers, tell a different side of your brand story, get in front of viewers on different devices, and push viewers further down the funnel.

For example, performance marketing agency ThomasARTS used CTV, video, and display advertising as part of a multi-channel strategy to reach more than 50,000 additional users and help drive qualified leads further down the funnel for one of the most trusted banks in the Western United States.

2. Get creative with your CTV ads

The more ad creatives you have, the more opportunities you have to optimize your campaigns. 

Once you have the visuals, storyline, and call to action planned, experiment with different ad lengths, imagery, and copy to target different audiences with more personalized ads and figure out which variations work best.

Need some inspiration? Check out these expert-designed CTV ad examples from our in-house Creative Studio team.

3. Reduce ad fatigue with frequency capping

We’ve all been there: you start streaming a show, and every time you reach a commercial break, you’re greeted with the same ad again and again.

There’s an old saying in marketing that a customer needs to encounter an advertiser’s message seven times before it starts to stick. But ad fatigue can force viewers to stop paying attention after seeing an ad only a few times.

Case in point: A 2025 report from TiVo found that 33.7% of North American TV viewers found excessive ads annoying, followed by 27.5% who said the same about repetitive ads.  

To avoid overexposing viewers, use frequency capping to ensure your ads reach unique audiences and aren’t shown to the same viewers repeatedly.

4. Use CTV to boost brand awareness and gauge brand recall

CTV is an ideal channel for increasing top-of-funnel awareness and measuring campaign performance from a single platform. 

For example, StackAdapt customer Add3Connect leveraged first-party and third-party segments to target CTV ads directly to customers interested in supplements and healthcare products for their client, Nuun. Then, they used StackAdapt’s in-platform brand lift studies to measure ad and brand recall, improving relative lift by +18.7%.

5. Target the right audiences

Whether you need to ensure compliance or want to target a specific customer at a particular time of day, use a programmatic CTV advertising platform like StackAdapt to ensure you’re reaching the right audience and getting the most out of your ad spending. 

6. Get interactive

Thanks to the functionality of devices like Apple TV and Roku remotes, viewers can now click on and interact with in-stream ads. This allows them to perform tasks such as entering their email address, pausing to quickly scan a QR code, or click to be redirected to a website—either on their phone or the CTV device itself—to learn more about a product.

Interactive formats can also help ads stand out. According to FreeWheel, 71% of viewers find interactive CTV ads attention-grabbing.

As interactive CTV ad formats continue to evolve, they’ll give advertisers more ways to engage viewers and create a more direct path to conversion.

Connected TV statistics

By now, you probably understand the benefits of using CTV advertising in your programmatic campaigns. But let’s wrap up with a few more noteworthy CTV stats that show where it’s headed, how it’s evolving, and why it needs to be part of your next marketing campaign.

• US adults are projected to spend an average of 2 hours and 56 minutes per day streaming CTV in 2027. Viewing is expected to surpass 3 hours per day in 2028.
• EMARKETER reports that CTV ad spend is up 19% in 2026 and projected to reach $48.89 billion USD in 2028.
• According to EMARKETER, 64.3 million millennials in the US stream content via CTV at least once a month, followed by Gen Z (55.7 million), Gen X (52.3 million), Baby Boomers (37.4 million), and Gen Alpha (23.3 million).
• 71.7% of all Americans are CTV users. That number is predicted to rise to 75.5% by 2030.

What’s next for connected TV advertising?

CTV advertising is evolving rapidly. Driven by advancements in technology and shifting viewer behaviors, the way marketers plan, execute, and measure CTV campaigns is constantly changing. 

Here’s a look at some of key trends shaping the future of CTV advertising, and how marketers can leverage them to drive even better results:

CTV enters its AI era

AI and machine learning are impacting nearly all aspects of modern advertising. 

Although generative AI’s perceived shortcomings often get an unfair amount of attention, ongoing advancements are making it easier for advertisers to create realistic, attention grabbing CTV ads at a fraction of the cost of traditional commercials. 

For example, StackAdapt’s AI Video Builder lets advertisers instantly draft scripts, assemble scenes, place products, and add voiceovers and music—reducing the time and resources needed for traditional video production. And, because advertisers can access the solutions and generate ads in the same platform where campaigns are planned, targeted, and measured, they can use campaign data to further optimize ad creative in real time.

The next phase of AI adoption in CTV will also focus heavily on planning, audience targeting, creative personalization, and reporting—areas that are uniquely positioned to benefit from deeper, predictive insights. Marketers will increasingly rely on AI-driven insights to predict viewer preferences and deliver the right creative at precisely the right moment, helping advertisers refine their targeting and reduce wasted ad spend.

As a result, AI is poised to help marketers optimize campaigns in real time, identify the right target audience, deliver tailored messaging, and uncover performance insights with a higher level of precision than previously possible, leading to more relevant ad experiences for viewers and stronger ROI for brands.

CTV moves down the funnel

CTV advertising has historically been used as an upper-funnel tactic for increasing brand awareness. But the rise of retail media networks and recent technological advancements are transforming CTV into a performance marketing channel.

As streaming becomes more saturated, advertisers are turning to interactive and shoppable ads to stand out from the crowd, with 41.8% of advertisers incorporating them into their CTV marketing strategies in 2025 alone.

Interactive CTV ad experiences—like games or polls—have also been proven to increase unaided recall by 36%, foot traffic by 13%, and brand affinity by 33%.

These innovations—along with more traditional formats, like QR codes—are reshaping CTV’s role in the funnel by providing viewers with a clearer path to purchase.

Ad-supported streaming continues to rise

Despite the rise of subscription-based streaming services, free ad-supported television (FAST) remains a popular option.

Ad-free subscription costs jumped 77% between 2020 and 2025, sending many viewers flocking to FAST alternatives. As a result, FAST will reach 136.2 million US viewers in 2027, or 39.9% of the population, and is expected to reach 18 million additional viewers by 2030.

Meanwhile, top streamers like Netflix, Paramount+, and Disney+ are also experimenting with ad-supported video-on-demand tiers that are cheaper than traditional subscription-based video-on-demand services.

With higher ad loads per hour and more viewers shifting to ad-supported platforms due to subscription fatigue and other cost considerations, marketers will have increasing opportunities to deliver targeted ads at scale.

Live sports goes programmatic

Four or five years ago, it was nearly impossible for advertisers to access live sports inventory through programmatic advertising.

These days, with viewers increasingly cutting the cord with cable and migrating to streaming platforms, publishers are opening premium live sports inventory to programmatic buying.

Platforms like StackAdapt are increasingly gaining access to live sports inventory—from the FIFA World Cup to Sunday Night Football—and other types of tentpole programming.

With 128.8 million US viewers projected to stream sports regularly in 2027, the opportunity for increased reach and higher viewer engagement has never been greater.

And while some sports coverage remains tied to linear TV networks, ad spend is set to increase with more sports moving to streaming. EMARKETER forecasts that CTV sports ad spend will rise from $3.5 billion USD in 2026 to $7.2 billion USD in 2030.

Bring the power of CTV to your advertising strategy

CTV is quickly becoming an essential part of a successful marketing strategy, offering precise targeting, real-time optimization, and measurable results at the click of a button. 

Ready to take your digital marketing campaigns to the next level? StackAdapt can help you seamlessly integrate CTV advertising into your media mix and achieve better performance across every channel.

Speak with our team to learn more about StackAdapt’s CTV advertising platform.

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