Is CTV advertising worth it for local businesses?

Content on WhatAnswers is provided "as is" for informational purposes. While we strive for accuracy, we make no guarantees. Content is AI-assisted and should not be used as professional advice.

Last updated: April 8, 2026

Quick Answer: CTV advertising can be worth it for local businesses, with 2023 data showing that 87% of U.S. households have at least one CTV device, and local CTV ad spending is projected to reach $2.1 billion by 2025. Businesses can target specific geographic areas and demographics, with average CPMs ranging from $20-$40, often lower than traditional TV. However, success depends on factors like creative quality and measurement capabilities.

Key Facts

87% of U.S. households had at least one CTV device in 2023
Local CTV ad spending projected to reach $2.1 billion by 2025
Average CTV CPMs range from $20-$40
CTV ad completion rates average 95% compared to 65% for mobile video
71% of CTV viewers watch ad-supported content

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. The technology emerged in the late 2000s with the rise of streaming services and smart TV adoption, but gained significant momentum during the COVID-19 pandemic when streaming viewership surged. By 2023, CTV had become a $21.2 billion advertising market in the U.S. alone, with local businesses increasingly participating. Unlike traditional linear TV advertising that requires buying expensive regional or national spots, CTV allows hyper-local targeting down to specific ZIP codes. Major platforms like Roku, Amazon, and Google's Display & Video 360 offer self-service tools that enable even small businesses to create and manage campaigns. The growth has been fueled by cord-cutting trends, with over 40% of U.S. households now without traditional cable subscriptions.

How It Works

CTV advertising operates through programmatic platforms that use automated bidding systems to place ads in available inventory across various streaming apps and services. When a viewer streams content on platforms like Hulu, YouTube TV, or Peacock, ad insertion technology identifies available ad slots and auctions them to advertisers in real-time. Local businesses can set targeting parameters including geographic location (DMA, city, or ZIP code), demographics, interests, and even specific streaming apps. Ads are typically 15-30 seconds and can be skippable or non-skippable depending on the platform. Measurement capabilities include impressions, completion rates, and increasingly, attribution to website visits or store traffic through device matching. Platforms provide analytics dashboards showing reach, frequency, and estimated audience size. Some services offer creative templates and production tools to help small businesses create professional-quality video ads.

Why It Matters

For local businesses, CTV represents an opportunity to reach cord-cutters who are inaccessible through traditional TV advertising. With 71% of CTV viewers watching ad-supported content according to 2023 surveys, there's substantial reach potential. The technology enables precise targeting that reduces waste compared to broad regional TV buys—a restaurant can target only households within delivery range, while a dental practice can focus on specific neighborhoods. CTV also integrates with digital marketing strategies, allowing retargeting of CTV viewers with display or social media ads. However, challenges include fragmentation across platforms, measurement inconsistencies, and creative production costs. Businesses must weigh these against traditional local advertising options like direct mail, radio, or linear TV, considering their specific audience and budget constraints.