How does CTV advertising work for CPG brands?

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Last updated: April 8, 2026

Quick Answer: CTV advertising for CPG brands works by delivering targeted video ads to consumers through internet-connected television devices like smart TVs, streaming sticks, and gaming consoles. Brands can use first-party data and programmatic buying to reach specific demographics, such as households likely to purchase their products, with CTV ad spending projected to reach $31.1 billion in the U.S. by 2024. This approach allows for precise measurement of ad performance through metrics like completion rates and attribution to sales, making it more effective than traditional linear TV for CPG companies aiming to boost brand awareness and drive e-commerce sales.

Key Facts

CTV ad spending in the U.S. is projected to reach $31.1 billion by 2024, up from $21.2 billion in 2022
Over 80% of U.S. households had at least one CTV device as of 2023, enabling broad reach for CPG brands
Programmatic buying accounts for over 70% of CTV ad transactions, allowing automated, data-driven targeting
CTV ads for CPG products often achieve completion rates above 90%, higher than many digital video formats
Major CPG companies like Procter & Gamble and Unilever have increased CTV ad budgets by 20-30% annually since 2020

Overview

Connected TV (CTV) advertising represents a significant shift in how consumer packaged goods (CPG) brands reach audiences, emerging alongside the rise of streaming services and smart devices since the late 2010s. CTV refers to television content delivered via internet-connected devices such as smart TVs (e.g., Samsung, LG), streaming media players (e.g., Roku, Amazon Fire TV), and gaming consoles (e.g., PlayStation, Xbox), bypassing traditional cable or satellite providers. For CPG brands—which include everyday products like food, beverages, toiletries, and household items—this technology offers a modern alternative to linear TV advertising, which has dominated since the mid-20th century. The adoption accelerated during the COVID-19 pandemic, with streaming viewership surging by over 70% in 2020, prompting CPG companies to reallocate budgets. By 2023, CTV had become a core channel, with platforms like Hulu, YouTube TV, and Netflix (with its ad-supported tier launched in late 2022) enabling targeted ad placements. This evolution is driven by the fragmentation of TV audiences and the demand for measurable ROI, as CPG brands seek to connect with consumers in an increasingly digital landscape.

How It Works

CTV advertising for CPG brands operates through a multi-step process that leverages data and automation. First, brands or their agencies use demand-side platforms (DSPs) to purchase ad inventory programmatically, often in real-time auctions, targeting specific audiences based on demographics, interests, or purchase behaviors—for example, aiming ads at households with a history of buying organic snacks. Ads are delivered as pre-roll, mid-roll, or post-roll videos during streaming content, with formats ranging from 15-second spots to interactive ads. Targeting relies on first-party data from retailers or third-party data providers, allowing CPG brands to reach viewers likely to be in-market for their products, such as parents during family-oriented shows. Measurement tools track key performance indicators (KPIs) like ad completion rates, which often exceed 90% for CTV, and attribution models link ad views to online sales or in-store purchases via mobile device IDs. This closed-loop system enables optimization, with brands adjusting campaigns based on real-time feedback to improve cost-per-acquisition (CPA) and return on ad spend (ROAS).

Why It Matters

CTV advertising matters for CPG brands because it addresses critical challenges in modern marketing, such as declining linear TV viewership and the need for granular targeting. By leveraging CTV, brands can achieve higher engagement and efficiency compared to traditional TV, with studies showing CTV ads drive a 20-30% lift in brand recall for CPG products. This is particularly significant for categories like packaged foods or personal care, where impulse purchases and brand loyalty are key. Real-world applications include campaigns by companies like Coca-Cola, which use CTV to promote new beverages to younger demographics, or P&G, which targets ads for laundry detergent during family streaming hours. The impact extends to e-commerce, as CTV ads often include QR codes or shoppable links, directly boosting online sales—a trend that grew by 40% among CPG brands in 2023. Overall, CTV enhances brand visibility in a crowded market, offering measurable outcomes that support strategic growth in the digital age.