What is CTV advertising?

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Last updated: April 8, 2026

Quick Answer: CTV advertising refers to digital ads delivered through internet-connected television devices like smart TVs, streaming sticks, and gaming consoles. The CTV advertising market grew from $8.1 billion in 2020 to over $21 billion in 2023, with projections reaching $40 billion by 2027. Unlike traditional linear TV, CTV enables targeted, data-driven advertising based on viewer demographics and behaviors. Major platforms include Roku, Amazon Fire TV, Apple TV, and smart TVs from Samsung and LG.

Key Facts

CTV advertising market reached $21.2 billion in 2023
Projected to grow to $40 billion by 2027
Over 85% of U.S. households had at least one CTV device by 2023
Roku holds approximately 25% of U.S. CTV market share
CTV ad completion rates average 95% compared to 45% for mobile video

Overview

Connected TV (CTV) advertising represents the digital evolution of television marketing, delivering ads through internet-connected television devices rather than traditional broadcast or cable systems. The concept emerged in the late 2000s with the introduction of smart TVs and streaming devices, but gained significant momentum after 2015 as streaming services proliferated. By 2020, CTV advertising spending reached $8.1 billion, driven by pandemic-era streaming adoption. The technology leverages over-the-top (OTT) delivery, bypassing traditional cable providers to reach viewers directly through apps and services. Major players include Roku (founded 2002), Amazon Fire TV (launched 2014), Apple TV (first generation 2007), and smart TV manufacturers like Samsung and LG. The industry standardizes through organizations like the Interactive Advertising Bureau (IAB), which established CTV measurement guidelines in 2021.

How It Works

CTV advertising operates through programmatic platforms that automate ad buying and placement across streaming services. When viewers watch content on CTV devices, ad insertion technology dynamically serves targeted ads based on first-party data (from streaming platforms) and third-party data (from data providers). The process begins with advertisers defining target audiences using demographic, behavioral, and contextual parameters. When a compatible viewer streams content, real-time bidding occurs among advertisers within milliseconds, with the winning ad delivered seamlessly during natural breaks. Advanced targeting capabilities include geographic precision (down to ZIP code level), household income brackets, viewing history patterns, and cross-device behavior tracking. Measurement utilizes impression-based metrics with verification through companies like DoubleVerify and Integral Ad Science, tracking completion rates, viewability, and attribution to specific actions like website visits or purchases.

Why It Matters

CTV advertising matters because it combines television's premium viewing experience with digital advertising's precision and measurability. For advertisers, it offers superior targeting capabilities compared to traditional TV, reducing wasted impressions and improving return on investment. Brands can reach cord-cutters and younger demographics who predominantly consume streaming content, with studies showing CTV viewers are 70% more likely to recall ads than social media viewers. For consumers, it enables more relevant advertising while funding free ad-supported streaming services like Pluto TV and Tubi. The technology drives innovation in interactive ads, shoppable commercials, and addressable advertising at household levels. As traditional TV viewership declines (linear TV ratings dropped 12% annually since 2020), CTV represents the future of television advertising, reshaping how $70+ billion in annual U.S. TV ad budgets are allocated.