Is CTV advertising replacing linear TV?

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Last updated: April 8, 2026

Quick Answer: CTV advertising is not fully replacing linear TV but is rapidly growing and reshaping the television advertising landscape. In 2023, CTV ad spending in the U.S. reached $25.9 billion, up from $21.2 billion in 2022, while linear TV ad spending declined to $61.3 billion from $64.1 billion. The shift accelerated during the COVID-19 pandemic as streaming adoption surged, with platforms like Netflix and Disney+ launching ad-supported tiers in 2022-2023. However, linear TV still commands significant viewership among older demographics and for live events like sports.

Key Facts

U.S. CTV ad spending grew to $25.9 billion in 2023, up 22% from 2022
Linear TV ad spending declined to $61.3 billion in 2023 from $64.1 billion in 2022
Netflix launched its ad-supported tier in November 2022, followed by Disney+ in December 2022
CTV penetration reached 87% of U.S. households in 2023, up from 82% in 2021
Linear TV still accounts for over 50% of total TV ad spending despite declining viewership

Overview

Connected TV (CTV) advertising refers to video ads delivered through internet-connected television devices like smart TVs, streaming sticks (Roku, Amazon Fire TV), and gaming consoles, while linear TV advertising involves traditional broadcast and cable programming with scheduled content. The transition began gaining momentum in the late 2010s as streaming services like Netflix (founded 1997, launched streaming 2007) and Hulu (founded 2007) disrupted traditional viewing habits. By 2020, the COVID-19 pandemic accelerated this shift dramatically - streaming minutes increased by 74% in Q2 2020 compared to 2019 according to Nielsen. Major media companies responded by launching their own streaming platforms: Disney+ debuted in November 2019, HBO Max in May 2020, and Peacock in July 2020. This created a fragmented landscape where advertisers had to adapt from buying traditional 30-second spots on linear networks to targeted, data-driven campaigns across multiple streaming platforms.

How It Works

CTV advertising operates through programmatic buying platforms that use automated systems to purchase ad inventory in real-time based on viewer data. Unlike linear TV's broad demographic targeting (e.g., women 25-54 watching at 8 PM), CTV enables precise audience segmentation using first-party data from streaming services and third-party data providers. Ads are served dynamically through server-side ad insertion (SSAI) technology, which seamlessly integrates commercials into streaming content. Measurement differs significantly: linear TV relies on Nielsen ratings estimating audience size, while CTV uses impression-based metrics with verification through companies like Integral Ad Science and Moat. Major ad-supported streaming platforms include Hulu (launched 2007), Paramount+ (rebranded from CBS All Access in 2021), and the newer ad tiers of previously subscription-only services like Netflix Basic with Ads ($6.99/month launched November 2022).

Why It Matters

The CTV advertising shift matters because it represents a fundamental change in how brands reach consumers and how media companies monetize content. For advertisers, CTV offers better targeting capabilities, reduced ad waste, and detailed performance analytics compared to linear TV's scatter-shot approach. For consumers, it means more personalized ad experiences but also potential privacy concerns as viewing data gets collected. The economic impact is substantial: traditional media companies like Disney are restructuring around streaming, with direct-to-consumer revenue growing 49% to $5.5 billion in Q4 2023 while linear networks decline. This transition also affects content creation, with streaming services investing billions in original programming ($15+ billion annually by Netflix alone) versus linear TV's decreasing production budgets.