Is CTV advertising cheaper than traditional TV?

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Last updated: April 8, 2026

Quick Answer: CTV advertising is generally cheaper than traditional TV advertising, with CPMs (cost per thousand impressions) typically ranging from $20-$40 compared to traditional TV's $30-$50+ for national spots. For example, a 2023 IAB report found CTV CPMs averaged 30-50% lower than linear TV equivalents. However, costs vary widely based on targeting precision, with highly targeted CTV campaigns sometimes exceeding traditional TV rates due to premium audiences.

Key Facts

CTV CPMs typically range $20-$40 vs. traditional TV's $30-$50+ (2023 industry data)
IAB 2023 report found CTV CPMs 30-50% lower than linear TV equivalents
Traditional TV upfront buying requires $50,000+ minimums while CTV can start under $5,000
CTV ad spending grew 21% to $26.9 billion in 2023 (eMarketer data)
Traditional TV ad spending declined 4.5% to $61.3 billion in 2023

Overview

Connected TV (CTV) advertising refers to video ads delivered through internet-connected television devices like smart TVs, streaming sticks (Roku, Fire TV), and gaming consoles, while traditional TV advertising encompasses linear broadcast and cable television. The shift began accelerating around 2015 as streaming services like Netflix and Hulu gained popularity, with CTV ad spending growing from $2.1 billion in 2017 to $26.9 billion in 2023 according to eMarketer. Traditional TV advertising, which dominated for decades with annual spending peaking near $70 billion in the 2010s, has seen consistent declines since 2017 as cord-cutting accelerated. The COVID-19 pandemic (2020-2022) accelerated CTV adoption, with streaming hours increasing 40% in 2020 alone. This created a bifurcated market where traditional TV maintains reach among older demographics while CTV dominates younger audiences.

How It Works

CTV advertising operates through programmatic platforms that use real-time bidding (RTB) to purchase ad inventory across streaming apps and services. Advertisers set targeting parameters (demographics, interests, viewing habits) and budgets, with algorithms automatically placing ads in available slots. Measurement uses digital metrics like impressions, completion rates, and attribution tracking through device IDs. Traditional TV advertising relies on upfront buying during annual negotiations (May-July) where advertisers commit to annual budgets for specific time slots based on Nielsen ratings estimates. Traditional TV measurement uses gross rating points (GRPs) and age/gender demographics from panel-based systems, with makegoods offered when ratings underdeliver. CTV offers precise targeting to household or device level, while traditional TV buys geographic markets (DMAs) and time slots.

Why It Matters

The cost difference matters because it enables smaller businesses to access television advertising previously reserved for large corporations with million-dollar budgets. CTV's lower entry point (campaigns can start under $5,000) democratizes TV advertising while providing better ROI tracking through click-through and conversion metrics. For consumers, CTV ads are often more relevant due to targeting, though privacy concerns exist. The shift impacts media economics, with streaming services like Disney+ and Netflix introducing ad-supported tiers in 2022-2023 to capture this revenue. Industry-wide, the trend forces traditional networks to develop streaming alternatives and hybrid models, fundamentally changing how content is funded and distributed.