What is CTV Advertising and How Does It Work? (2025 Guide)

Your audience isn’t just watching TV, they’re streaming, skipping, and switching across screens. Connected TV (CTV) lets you reach them with precision ads right on their smart TVs.

Unlike traditional commercials, CTV ads are targeted, measurable, and optimized in real time..

In this guide, we’ll break down how CTV advertising works, why it’s booming, and how to build high-impact campaigns that convert.

Let’s start with the basics.

What Is Connected TV?

Connected TV is any internet-connected television used to stream video content on services like Amazon Prime. Some common CTV devices include:

• Smart TVs like the Samsung OLED, which come with an operating system and preloaded apps.
• Set-top boxes or streaming devices like Roku that transform ‘dumb’ TVs into internet-connected devices that can access streaming content.
• Gaming consoles like the Xbox that allow users to stream movies, TV shows, and music in addition to playing video games.

What Is Connected TV Advertising?

Connected TV advertising means showing ads to people who watch streaming content on internet-connected TVs, like smart TVs or devices such as Roku and Fire TV.

Because CTV ads are delivered digitally, they offer several advantages over traditional commercials:

• Precise Audience Targeting: Reach specific demographics, interests, and viewing habits.
• Real Time TV Measurement: Track ad impressions, clicks, and conversions in real time.
• Cross-Device Retargeting: Re-engage viewers who have previously interacted with your brand online.
• Holistic Attribution: Gain a comprehensive understanding of how your CTV campaigns contribute to overall marketing goals.

As such, media buyers placing ads on CTV gain the ability to pinpoint relevant buyers and track viewer activity following exposure. This paves the way for more data-driven and personalized campaigns that drive business results.

OTT Advertising vs. CTV Advertising

CTV and OTT (short for over-the-top) are often used interchangeably, but a key distinction exists between the two:

1. OTT is the delivery method (streaming video over the internet).
2. CTV refers to the devices used to access OTT content (smart TVs, streaming devices, etc.).

CTV is thus a more premium subset of OTT that focuses on big-screen TVs where co-viewing is more common (resulting in more ad impressions) and viewers are more engaged. 

Media buyers need to understand this distinction. After all, a YouTube ad that plays while a user listens to music videos on their mobile device is not as valuable as a commercial that airs during a live broadcast of the Olympics.

Here’s a full breakdown of CTV and OTT:

Read our full post on OTT vs. CTV →

7 Benefits of CTV Advertising in 2025

CTV offers all the benefits of TV advertising, combined with the precision targeting and measurement of digital mediums. Here are some of the many advantages of placing ads on streaming TV. Here’s a look at the key advantages.

1. Hypertargeted and Localized

When running programmatic CTV campaigns, marketers can target specific audience segments. This replaces the spray-and-pray approach of linear TV with a much more precise strategy. 

CTV targeting can take many different forms. At Strategus, we’re proponents of layering first- and third-party data sources to build custom audiences for each campaign.

Check out our CTV targeting deep dive to learn more→

2. Personalized and Relevant

In this way, CTV allows brands to reach the right people, at the right time, with the right message by customizing their creative based on which customer segments are being targeted. 

Say a tourism board was running campaigns to three key customer segments: ski and snowboard enthusiasts, outdoor adventurers, and luxury travelers.

The ad creative could be personalized as follows:

• Ski and Snowboard Enthusiasts: For this segment, the ad could showcase the most well-known ski resorts with an early bird promo for lift tickets.
• Outdoor Adventurers: These ads might combine shots of breathtaking hikes, pristine lakes, and idyllic camping locations, with a call to action (CTA) directing users to the website for more information.
• Luxury Seekers: For this segment, the creative could focus on luxury spas, gourmet dining experiences, five-star hotels, and exclusive VIP deals.

The result is more relevant and actionable ads on the biggest screen in the house.

3. Omnichannel Retargeting

Since CTV ads run in digital spaces, advertisers can reach the same viewers again on other devices. For example, a tourism campaign could follow up CTV ads with YouTube videos, Spotify audio ads, and Instagram posts.

This kind of full-funnel approach is rare in CTV, but it’s central to our strategy at Strategus. We use deterministic matching (powered by identity graph partners) to make sure we’re only retargeting people who’ve already seen a brand’s CTV ad. This keeps ads relevant and effective.

4. Cost-Effective and High-Performing

With CTV, media buyers only pay for ads that reach their desired audience. This eliminates wasteful ad impressions served to the wrong viewers, all while boosting performance with more relevant experiences.

Strategus Co-Founder Joel Cox explains:

“Programmatic advertising brings new capabilities to more mid-market companies who can now afford more precise targeting, and therefore more accessible budgeting and reach. The opportunities for more advertisers are democratized by new technology. 

We want to move the market more toward where it should go, where ads are targeted to individuals in the audience, who see ads that are relevant to them, as opposed to the old way, where ads are targeted more toward the content that people are watching. The data-driven approach makes so much more sense as the content is exploding with digital streaming over the internet. Serving relevant ads to the right people at the right time is where the advertising industry has wanted to go for generations.”

5. Real-Time Tracking and Multi-Touch Attribution

CTV gives marketers access to detailed data. This means you can see what happens after someone sees your ad, like if they bought something online, visited a store, or looked up your product.

Need an example? The University of Washington worked with Strategus to boost ticket sales for its sports teams.

The campaign brought in $296,000 in revenue and gave the school clear insights they couldn’t get before.

Brian Bowsher, the associate athletic director, explains:

“It was always hard to track the impact of our ads that ran on ESPN or NBC Nightly News. Working with Strategus, we’re now able to report data showing how many people saw our spots, how many took the next step and went to our website, and what percentage of those engagements resulted in transactions. This has really helped quantify our ROI.”

6. Big-Screen, Multimedia Impact

Many of the advantages above can be attributed to CTV’s digital nature. But CTV also has something that other digital channels lack: Big-screen delivery to hyper-engaged viewers.

With sight, sound, and motion, CTV ads make a more memorable impact than static display ads or skippable YouTube ads. This is all the more true when they run during live or premium content like a sporting event or a season premiere.

7. Ongoing Optimization

CTV advertising is flexible and easy to update. But if you just “set it and forget it,” you’ll miss chances to improve. Taking a more hands-on approach helps you test what works and build better campaigns over time.

With detailed data on engagement and conversions, marketers can keep testing and adjusting to get better results. Of course, not everyone has the time or team to do this. That’s where a managed CTV services partner like Strategus can help by handling all the details for you.

How to Buy CTV Ads

You can buy CTV ad inventory in a few different ways, like through:

1. Direct sales
2. Self-serve DSP
3. Partnering with a managed service provider like Strategus 

While directly purchasing ad space takes a more content-specific approach akin to legacy TV, programmatic ad-buying with either a DSP or managed services provider allows media buyers to place ads on a per-viewer basis.

Almost 90% of CTV buys are transacted programmatically today due to the benefits of programmatic placement.

Here’s a closer look at each category:

How Does Programmatic CTV Work?

If you go with a DSP or managed service provider like Strategus, your ads will be placed programmatically via a real-time bidding. The process can be summarized in five steps.

1. A user settles in for their favorite show on a streaming app like Hulu, Tubi, or YouTube TV.
2. The app sends a bid request to a supply-side platform (SSP) looking for advertisers to compete for the ad spot. The request includes information about the user’s digital footprint, such as their viewing habits, demographics, location, and more.
3. An ad exchange connects the SSP with demand-side platforms (DSPs) to centralize and automate media buying across multiple sources.
4. A DSP or an ad network connects advertisers to the exchange, allowing them to set parameters for how they target ads, and then make purchases via real-time bidding.
5. In a split second, the highest bidder wins the ad slot, and the viewer is served a relevant commercial without any noticeable lag.

And while it sounds simple enough, don’t let this explanation lead you astray. The CTV ecosystem grows in complexity each day — with countless ad networks, DSPs, ad exchanges, and more vying for media buyers’ attention. 

How Connected TV Audiences Are Targeted

CTV targeting will vary depending on what your ad tech stack looks like. Some DSPs still use rather fundamental data sources to build generic segments. Likewise, your data will be limited if you’re pacing ads via direct sales.

At Strategus, though, we take a layered approach to targeting that incorporates multiple data sources to maximize results. Rather than providing off-the-shelf audience segments, we work with agencies and brands to build custom audiences based on a mix of tactics.

Our targeting methods include:

1. Website Retargeting: Reengage warm leads on the big screen and lure online shopper back to their abandoned carts. This keeps your brand top of mind after leads step away from the computer.
2. First-Party Data: Leverage customer data from your CRM to deliver personalized CTV ads directly to your contacts’ living rooms. 
3. Lookalike Modeling: Expand your reach by building custom lookalike audiences. This powerful tactic is our second-best performer for driving results.
4. Location-Based Retargeting: Reconnect with users who‘ve visited your stores — or conquest foot traffic from competitor locations. Both are powerful tactics to translate physical touchpoints into digital engagement.
5. Smart Audience Contextual: Reach consumers actively researching your services by targeting viewers based on the websites they’ve been visiting and keywords they’ve been typing into Google.
6. ACR Data Targeting: Reach specific households based on their TV viewing habits and interests for precise audience alignment. This could mean showing an ad for a Lexus convertible on its way to a golf course to a viewer who regularly watches live golf.
7. Linear TV Extension: Bridge the gap between your linear TV campaigns and CTV by targeting households exposed to your TV ads for increased reach and frequency. A combination of both mediums ensures that your efforts aren’t siloed.
8. Amazon Data Targeting: Leverage Amazon purchase data to reach consumers actively shopping for products related to your campaign. For instance, a person who often purchases gluten-free products may see a commercial for a local health store.

CTV Marketing Best Practices for Driving Leads

CTV advertising sits at the intersection of linear TV and digital advertising, allowing marketers to reach engaged viewers in a targeted and measurable way. But you still need to approach it strategically to drive results

We’d recommend prioritizing the following best practices when getting started.

1. Define campaign goals and target audiences: The first step to crafting a CTV campaign is defining your goals (e.g., brand awareness, website visits, foot traffic to a brick-and-mortal location) and target audience segments. This will lay a foundation for more targeted and actionable campaigns.
2. Gather existing video assets: Next, assess your existing video library. Look for high-quality, on-brand content that aligns with CTV's technical requirements. This includes professional production value, clear branding throughout, a singular focus on a key message, and clean design with easy-to-read text and contrasting colors for optimal viewing on large screens.
3. Update what you have or build CTV-first creative: Whether you’re updating existing video assets or creating new ads from scratch, it’s all about giving users a clear call to action based on your campaign goals. Some tactics for doing this include promoting current deals, showcasing your current inventory with dynamic creative, or incorporating interactive elements like QR codes that drive action.
4. Personalize messaging to different audiences: The key to CTV advertising is delivering relevant ads that resonate with viewers. As such, tailoring ad creative to different buyers drives better results. This could mean swapping out the B-roll or highlighting different products and services.
5. Nail the basic requirements and specs: Align with technical specs for the length (15 or 30 seconds), file format (MP4), and resolution (1080 p). Failure to meet these specs can cause latency and buffering, potentially causing viewers to abandon the app or even reboot their devices.
6. Put guardrails in place to prevent ad fatigue: Rotate at least 3 creative variations can help prevent ad fatigue, as well as refreshing your ads quarterly. You’ll also want to monitor campaign frequency and engagement to adjust your strategy based on what the data shows.
7. Integrate your CTV ads into full-funnel campaigns: Expand your reach and boost conversions by layering retargeting efforts across various channels like display ads, paid social media ads, and paid search ads. This allows you to deliver targeted messages throughout the customer journey, from initial brand awareness to website visits and ultimately, conversions.
8. Test and optimize campaigns in flight: Just like other digital channels, CTV campaigns should be monitored and optimized on an ongoing basis.

Check out our Guide to CTV Best Practices for more details.

Why CTV Is the Future of TV Advertising

Streaming keeps growing—U.S. adults now spend over 123 minutes a day on CTV.

Live sports, once the last holdout for cable, are moving to platforms like YouTube TV, Amazon Prime, and Netflix, driving even more cord-cutting.

At the same time, ad-supported streaming is the norm. Netflix, Disney+, and Max now offer ad tiers, while FAST services like Tubi and Roku Channel rely entirely on ads.

Viewers have already shifted. Now live sports are following. That’s why CTV ad spend keeps rising, while linear TV keeps shrinking.

Media Universe Cartographer Evan Shapiro explains:

“Media buyers are moving money away from non-digital platforms, where they are far more certain about the return on their marketing investment (ROMI). And, that movement is accelerating…

This was already happening before the writers union shut down TV. But, when you add the strike, mix in the subscription apocalypse, sprinkle on the rise of FAST, add a dash of Bob Iger floating ESPN and Disney for sale, knead in YouTube’s acquisition of NFL Sunday Ticket, and bake it all at 450 degrees of shitty-ass measurement… You get a perfect recipe for the death of traditional media as we know it.”

Read our full report on The Future of TV: How Advertisers Can Prepare for a Converged Landscape  →

Let Strategus Be Your CTV Partner

With Strategus as your partner, you get the broad reach, data integrations, and expertise required to drive CTV results. Our combination of premium inventory and data-driven targeting ensures precise ad placement focused on your viewers, thus maximizing campaign results.

Some other advantages of working with us include:

1. Big Screen Focus

Our CTV-first strategy captures your audience’s attention on the largest screen in the household. Sight, sound, and motion bring your brand to life in a way that no other marketing channel can recreate.

2. Cross-Device Retargeting

We keep your audience connected across every screen by re-engaging them with follow-up ads across other devices, reinforcing your message and driving conversions.

3. Data-Driven Strategies

Our ecosystem of 200+ data providers ensures targeting and attribution like never before, enabling us to develop informed strategies and adapt on the fly based on what the data reveals.

4. Multi-Publisher Control to Manage Frequency

As a vendor-agnostic partner, we make it easy to reach your audience no matter what they’re tuning into — while also capping frequency and conducting measurements across the entire OTT ecosystem.

The results speak for themselves, which is why we have countless real-world success stories of agencies and brands that have worked with us to turn connected TV into a performance marketing channel.

Contact us today to get started.

Frequently Asked Questions

How Much Does It Cost to Advertise on CTV?

CTV ad costs vary based on targeting, inventory quality, and buying method. CPMs typically range from $20 to $50. Premium placements during live events or on top-tier platforms can cost more. Programmatic buying helps control costs by letting advertisers pay only for impressions that match their target audience.

How to Advertise on CTV?

To advertise on CTV, choose a method: direct deals with publishers, self-serve demand-side platforms (DSPs), or managed service providers like Strategus. Define your audience, upload compliant video creative, and set campaign goals. Programmatic platforms use real-time bidding to deliver your ad to the right viewers on smart TVs.

How Is CTV Measured?

CTV measurement includes metrics like impressions, completion rates, click-throughs, conversions, and view-through rates. Advanced tools also track offline actions like store visits and sales. Marketers often use multi-touch attribution and integrate first-party data to connect ad exposure with real business outcomes across devices and channels.

What Types of Advertisers Benefit from Connected TV?

Brands with broad or niche audiences, including ecommerce, automotive, healthcare, education, and local businesses, benefit from CTV. It works well for marketers who want measurable results, hyper-targeting, and a strong visual presence. CTV is especially effective for campaigns focused on awareness, consideration, or driving conversions.

How to Implement CTV/Connected TV for App Businesses?

App businesses can use CTV to drive installs and engagement by targeting relevant audiences through behavioral or contextual data. Link your mobile measurement partner (MMP) with a DSP to track conversions. Use QR codes or short URLs in your CTV ads to drive direct app actions from viewers.

What Are the Best Data Sources for TV Advertising?

Top data sources include first-party CRM data, website behavior, location data, purchase history, and ACR (automatic content recognition) from smart TVs. Advertisers also rely on third-party providers like Nielsen, Experian, or Amazon to enrich audience segments and enable precise targeting across the programmatic TV ecosystem.

How to Track TV Advertising?

Track TV ads by combining impression logs with pixel tracking, unique URLs, QR codes, or coupon codes. Use attribution platforms to connect ad exposure to online and offline actions. For CTV, integrate DSP reporting with tools that track multi-device behavior, purchases, or in-store visits.

How Do I Add CTV as One of My Advertising Tactics?

Start by assessing your media mix and identifying where CTV fits in the funnel. Choose a DSP or partner with a managed service. Upload video assets, define audience segments, and launch test campaigns. Monitor performance, retarget across channels, and adjust creative to align with campaign objectives.

What Challenges Stand in the Way of Holistic Ad Measurement Across Linear and CTV?

The biggest challenges include siloed data, inconsistent metrics, and lack of cross-platform identifiers. Linear TV lacks user-level targeting, while CTV operates in fragmented digital environments. Bridging these systems requires unified attribution tools and partnerships with vendors that can aggregate and normalize performance across both ecosystems.

What's the Best CTV Advertising and Measurement?

Top solutions include The Trade Desk for programmatic buying, Innovid and Google Campaign Manager for cross-platform measurement, and Strategus for managed CTV services. These platforms offer advanced targeting, real-time optimization, and consolidated dashboards that help marketers manage performance and prove ROI across multiple screens.