CTV advertising is the practice of serving digital ads on internet-connected television screens, whether through smart TVs, streaming devices like Roku and Amazon Fire TV Stick, or gaming consoles like PlayStation and Xbox. It combines the big-screen impact of traditional TV commercials with the precise targeting and measurement capabilities of digital marketing. As more households cut the cord and shift to streaming, CTV has become one of the fastest-growing ad channels for brands of all sizes.
How CTV Fits Into the Streaming Landscape
Three terms get tossed around interchangeably, but they mean different things. “Streaming” is the broadest: any audio or video delivered over the internet to any device. “Over-the-top” (OTT) narrows that to content streamed through apps or browsers rather than through a traditional cable or satellite subscription. You can watch OTT content on a phone, tablet, laptop, or TV. “Connected TV” (CTV) narrows it further to just the television screen itself.
Think of it this way: when you open a streaming app on your phone, that’s OTT but not CTV. When you open the same app on your smart TV or through a Roku stick, that’s both OTT and CTV. CTV advertising specifically targets the TV-screen experience, which matters because viewing habits, attention levels, and ad formats on a television are fundamentally different from those on a mobile phone.
CTV Ad Formats
The most familiar CTV ad is the standard video spot that plays before, during, or after streaming content, similar to a traditional TV commercial. These in-stream ads are typically 15 or 30 seconds long and, unlike many digital video ads, are usually unskippable. That’s a big reason CTV completion rates regularly land in the 90th percentile: viewers watch the entire ad because they can’t click past it.
But the format menu has expanded well beyond the standard commercial break. The IAB Tech Lab, which sets technical standards for the industry, recognizes several newer formats:
- Pause ads appear when a viewer hits pause on their remote, filling the idle screen with a branded message rather than a frozen frame.
- Screensaver ads work similarly but are triggered by the TV or app itself after a period of inactivity, rather than by the viewer.
- Menu ads show up on the home screen or content navigation menu of a streaming platform, reaching viewers before they even start watching something.
- Overlay ads appear on top of content during playback, often as a banner along the bottom of the screen or a small picture-in-picture box. Some include QR codes viewers can scan with their phones.
- Squeeze-back ads shrink the program content to one side of the screen and place the ad alongside it, so neither the show nor the ad covers the other. These sometimes appear as an L-shaped frame or a side-by-side double box.
- In-scene insertion ads digitally composite branded elements into the content itself, like a virtual billboard in a scene or a product placed on a character’s desk, blending into the environment rather than interrupting it.
These non-traditional formats let advertisers reach viewers without relying solely on commercial breaks, which can reduce the feeling of interruption that drives some viewers away from ad-supported tiers.
How Advertisers Buy CTV Inventory
CTV ads can be purchased through several methods, and the right one depends on budget, control preferences, and how hands-on you want to be.
Real-time bidding (RTB) is the most common programmatic approach. Advertisers bid on individual ad impressions as viewers start streaming, competing in automated auctions that happen in milliseconds. RTB offers flexibility because you’re not locked into a fixed deal. You set your targeting parameters and budget, and the system finds available inventory that matches.
Private marketplace (PMP) deals give advertisers more control over where their ads appear. Instead of bidding in an open auction, you negotiate directly with a publisher or streaming network to secure specific placements. This is popular among brands that want to guarantee their ads run alongside premium content rather than wherever an algorithm places them.
Programmatic direct automates the traditional direct-buy relationship. You work with a publisher to guarantee a set number of impressions on specific inventory, but the execution (serving, reporting, optimization) is handled programmatically. This combines the quality assurance of a direct deal with the efficiency of automated ad delivery.
Some streaming platforms have also launched self-serve ad managers that let smaller advertisers buy CTV inventory using the same audience-targeting tools they already use on social media platforms. Demographics, behavioral segments, retargeting, and custom audiences are all available, making TV advertising accessible to brands that would never have bought a traditional TV spot.
Targeting Capabilities
CTV’s biggest advantage over traditional television is targeting precision. Instead of buying a time slot and hoping the right people are watching, you define the audience you want to reach and let the technology find them. Common targeting options include demographic filters (age, gender, household income), behavioral data (past purchase activity, browsing habits), geographic targeting down to the zip code level, and interest-based segments built from first-party or third-party data.
Retargeting is also possible. If someone visits your website or interacts with your brand on another channel, you can serve them a CTV ad the next time they stream content on their television. This cross-device capability closes a loop that traditional TV never could: connecting what someone did on their phone or laptop to what they see on their TV screen.
Measuring CTV Ad Performance
Measurement is where CTV diverges sharply from both traditional TV and standard digital advertising. A TV commercial historically offered limited feedback: estimated audience size based on panel data and not much else. Standard digital ads offer clicks. CTV sits in between, with its own set of metrics.
Completion rate measures the percentage of viewers who watch your ad all the way through. Because most CTV ads are unskippable, completion rates tend to be very high, often above 90%. That makes completion rate less useful as a standalone performance indicator and more of a baseline expectation.
The more meaningful measurement challenge is attribution: connecting a CTV ad view to a later action like a website visit, app download, or purchase. View-through attribution tracks conversions that happen after someone sees your ad, even if they don’t click anything in the moment. This matters because CTV ads don’t have clickable links the way a banner ad does. Someone watches your ad on their TV, then picks up their phone and searches for your product 20 minutes later. View-through attribution connects those dots.
Multi-touch attribution goes further by assigning credit to each marketing touchpoint in a customer’s journey. If someone saw your CTV ad, then clicked a social media ad, then converted through a search ad, multi-touch attribution quantifies how much each of those interactions contributed to the final sale.
Cross-device measurement helps you understand whether your CTV campaign is reaching new people or the same people you’re already reaching on other screens. Without deduplication (removing overlap between devices), you might think you’re reaching 500,000 unique viewers when you’re actually reaching 300,000 people across multiple devices. Platforms that offer cross-screen measurement let you track incremental reach and avoid overspending on redundant impressions.
What CTV Advertising Costs
CTV ads are priced on a CPM basis, meaning cost per thousand impressions. CPMs vary widely depending on the content quality, the specificity of your targeting, the ad format, and whether you’re buying through open auctions or private deals. Premium streaming inventory on well-known networks commands higher CPMs than smaller, niche platforms. Highly targeted campaigns (narrow demographics, specific geographic areas) also cost more per impression because the available audience pool is smaller.
As a frame of reference, CTV CPMs generally sit above standard digital display and social media rates but below the effective cost of a national broadcast TV buy when you factor in wasted reach. The gap between CTV and social media pricing has been narrowing as social platforms like Meta have seen CPM increases of 30% or more year over year. For many advertisers, the combination of precise targeting, high completion rates, and big-screen visibility makes CTV cost-competitive even at a higher per-impression price, because fewer impressions are wasted on people outside the target audience.
Who CTV Advertising Works For
CTV is no longer reserved for Fortune 500 brands with seven-figure media budgets. Self-serve platforms from major streaming networks have lowered the entry point significantly, making it viable for mid-size e-commerce brands, regional businesses, and direct-to-consumer companies. If you’re already running digital campaigns and want to expand to a TV-quality environment with measurable results, CTV is the most direct path. The targeting and measurement tools will feel familiar if you’ve used any major digital ad platform, and the creative requirements (a polished 15- or 30-second video spot) are the main additional investment beyond your media spend.