The seismic shift in television advertising

Television advertising is undergoing a historic revolution. For years, linear TV reigned supreme as the go-to medium for reaching audiences, but it’s now evolving at lightning speed to embrace the dynamic world of connected television (CTV). If today’s viewing habits persist, CTV is poised to eclipse linear TV in audience size, cementing its status as the preferred choice for viewers—and potentially the most powerful tool in a marketer’s arsenal.

 

Recent data underscores this shift. By 2024, CTV accounted for over one-third of total TV viewing time in the U.S., a figure that continues to climb as streaming gains momentum. According to industry forecasts, CTV ad spending in the U.S. reached $30.10 billion in 2024, representing roughly one in every ten dollars spent on digital advertising, with projections suggesting it could hit $40.90 billion by 2027. These numbers, highlighted by sources like eMarketer, reflect CTV’s meteoric rise and its growing dominance in the video advertising landscape.

 

For those unfamiliar with this transformative medium, questions naturally arise: What exactly is CTV, and why is it generating such buzz? Let’s dive into the essentials.

 

 

What is connected TV?

 

Connected TV, commonly abbreviated as CTV, refers to television content streamed over the internet and viewed on a TV screen. Unlike linear TV—which relies on cable, satellite, or an antenna to deliver scheduled programming—CTV harnesses the power of internet connectivity to bring entertainment directly to your living room.

 

 

Examples of CTV in action

 

CTV spans a wide range of viewing experiences, all united by their internet-driven delivery to a television set. Picture this: streaming YouTube clips on your TV through a Roku device? That’s CTV. Enjoying a movie on Apple TV+ via your smart TV’s built-in app? Also CTV. Marathon-watching Stranger Things on Netflix through a gaming console hooked up to your screen? You guessed it—CTV. If it’s internet-streamed and displayed on a TV, it falls under the CTV umbrella.

 

 

The world of CTV is vast and varied, with distinct categories that define how viewers access content. Here’s a rundown of the key players:

 

• SVOD (Subscription Video on Demand): These are the subscription-based streaming giants like Netflix, Disney+, Max, and Amazon Prime Video, where a monthly fee unlocks a treasure trove of movies and shows.

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• AVOD (Ad-Supported Video on Demand): This category includes platforms fueled by ads rather than subscriptions. It splits into two camps: services like Hulu or Peacock that offer ad-supported subscription tiers, and free-to-watch options like Tubi that rely entirely on advertising revenue.

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• BVOD (Broadcast Video on Demand): A niche within AVOD, BVOD delivers ad-supported streaming content from traditional broadcasters. Think of catching up on NBC shows via Peacock’s free tier—classic broadcast meets modern streaming.

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• FAST (Free Ad-Supported Television): FAST services blend linear-style channels with on-demand options, all free to viewers and funded by ads. Leading names include Pluto TV, Samsung TV Plus, and The Roku Channel, offering a cable-like experience without the bill.

 

 

How does OTT fit in?

 

You might hear “OTT” tossed around alongside CTV, but they’re not quite the same. OTT, or “over-the-top,” is a broader term encompassing all internet-streamed video content, whether it’s watched on a phone, laptop, or TV. CTV is a specific slice of OTT—one that’s all about the television experience.

 

 

Why all the excitement?

 

The move from linear TV to CTV is nothing short of a cultural and commercial tidal wave. Viewers are ditching traditional cable at unprecedented rates—by 2024, cord-cutting households outnumbered pay-TV subscribers in the U.S. for the first time. As networks roll out CTV platforms with robust advertising options, marketers are racing to keep pace.

 

CTV offers something linear TV never could: precision. With advanced targeting and detailed analytics, brands can allocate budgets more strategically, craft campaigns that hit the mark, and measure outcomes with clarity. Plus, CTV allows for smarter ad frequency management across platforms, cutting down on the repetitive bombardment that frustrates viewers. The result? A leaner ad load compared to linear TV, enhancing the overall watching experience.

 

Looking ahead, the financial stakes are staggering. Ad spending on CTV is expected to soar by billions in the coming years, with forecasts pointing to continued double-digit growth through 2027. It’s no wonder those three letters—CTV—are on everyone’s lips in the marketing world.