Connected TV (CTV) is the fastest-growing major ad channel in the US of all the formats we track. It’s projected to grow 22.4% to reach a total of $30.10 billion in 2024, according to eMarketer’s October 2023 forecast.

CTV’s surge can be attributed to ad performance, audience segmentation, data-driven insights, viewability on screens, and interactive capabilities. Integrations with retail media and social media will boost CTV spend, especially as advertisers seek new ways to incorporate first-party data into their audience-targeting strategies. Here’s what you need to know about CTV.

What is CTV?

CTV advertising refers to digitally sold ads that appear on TV screens, including ads shown on smart TVs that have their own internal internet capabilities and external devices like Amazon Fire sticks, Blu-ray players, and gaming consoles. CTV ads may also appear on streaming devices and services, as well as traditional TV offshoots like YouTube TV and Hulu with Live TV. CTV does not extend to non-TV devices. 

People are spending more and more time watching CTV. In 2024, US adults will average 123.4 minutes per day with CTV, putting it ahead of desktop/laptop (64.7 minutes) but behind mobile devices (234.8 minutes), per eMarketer’s June 2023 forecast. That said, the gap between CTV and mobile is narrowing.

mobile remains dominant but ctv narrows the gap
A chart showing that mobile is dominant in time spent on connected devices per day, but CTV is narrowing the gap. 

As time spent on CTV increases, so will the ad opportunity. CTV will see sustained double-digit ad spend growth in the US through the end of 2027, according to a March 2023 eMarketer forecast. The format will account for 1 in 10 US digital ad spend dollars in 2024.

us connecte tv ad spending 2021-2027
A chart showing US CTV ad spending from 2021 to 2027. 

Benefits of CTV advertising

CTV advertising can be more attractive than linear TV advertising because ads are easier to target and measure.

  • Target audience: CTV allows for precise audience segmentation based on interest, demographics, and viewing habits. And while other industries like social media struggle with signal loss, partnerships between streamers and retail media networks have offered more first-party data into this advanced targeting capability. 
  • Analytics: CTV allows advertisers to view trends in real time, which can enhance decision-making and campaign optimization.
  • Interactivity: On some platforms, viewers can click through ads to get more information or make a purchase, putting these ads closer to the bottom of the funnel than linear ads.

CTV is buoying TV ad spend on the whole. CTV ad spend is growing at a faster clip than the rate at which US linear TV ad spend is declining. “CTV is catching up with linear TV, but [a point of inflection] is not likely to happen until probably toward the end of this decade,” said eMarketer principal analyst Paul Verna.

There are still advantages to linear TV, especially during major events like the Olympics, World Cup, and US elections, but most live sports coverage is available via CTV (though coverage is fractured across platforms). Linear can also be useful for reaching older audiences. But “the future is now for CTV,” according to Verna.

us tv and connected tv ads spending 2021-2027
A chart showing US TV and CTV ad spending from 2021 to 2027.

How are CTV ads bought and sold?

There’s no one way to buy CTV ads.

  • Advertisers can buy from a streaming service or TV network directly, giving them access to exclusive inventory but limiting scale.
  • They can purchase via programmatic platforms, which allow them to bid across multiple apps’ inventory.
  • Or they can buy from CTV device-makers, which allows placements across many apps but means less control of those placements for advertisers.

The fragmentation of this buying process is one of the factors limiting CTV ad spend growth from taking off even further. Right now, there is no measurement standardization across streaming platforms, which is limiting ad dollar growth.

When buying CTV ads across platforms, advertisers need to make sure ads are varied and not repetitive so that a viewer doesn’t see the same ad several times in different places.

Programmatic ad spend on CTV

US CTV programmatic display ad spend will reach $24.44 billion in 2024, according to a December 2023 eMarketer forecast. That’s a growth of 23.1% over 2023. US CTV programmatic video ad spend will reach $24.01 billion in 2024 at a growth rate of 23.3% YoY.

More CTV ad dollars are going to upfronts, a series of presentations made by major TV players to draw advertiser commitments. eMarketer projected upfront advertisers to spend $8.66 billion on CTV video ads during the 2023 season and rise to $11.76 billion in 2024. Upfront CTV spend is also forecast to make up about 40% of all CTV spend.

CTV measurement 

CTV offers measurement advantage over linear in the sense that it is easier to track a consumer’s journey from first impression to purchase. But because different streamers exist within their own separate walled gardens, it can be difficult to track a campaign’s performance following the same consumer across networks.

For shoppable ads, return on ad spend is easier to track, because the ads go beyond just brand awareness to actually deliver conversions. But for ads that don’t immediately result in a one-to-one conversion within the same environment, attention metrics like video completion rate are useful.

Streamers tend to use multiple currencies when assessing CTV performance, something eMarketer senior analyst Ross Benes doesn’t expect will change anytime soon. “I just don’t expect streaming to coalesce around a single currency like TV did for decades. It’s just going to be more bifurcated,” said Benes in September 2023.

CTV’s audience and demographics

Among Gen Z, linear viewership is declining by a couple of million each year, and will fall below 40 million viewers in 2024, according to an eMarketer forecast. But the generation’s CTV viewership is on the rise, approaching 55 million viewers in 2024.

US CTV user penetration will be over 80% in 2024 for ages 25 to 54 and over 75% for ages 12 to 17, per eMarketer’s September 2023 forecast. By contrast, less than 50% of people ages 0 to 11 and 65 and older will be CTV viewers.

Who are the biggest CTV platforms?

More streaming mediums are adding ad-supported tiers, but not every player is benefiting equally, per eMarketer’s Digital Video Forecast and Trends Q4 2023 report. Disney+ and Netflix are newer to the ad-supported CTV game and thus have plenty of room to grow, while Amazon added ads to Prime Video in January 2024. 

Hulu: Hulu is the biggest player in US CTV ad spend, with $3.84 billion in projected CTV ad revenues for 2024, according to an October 2023 eMarketer forecast. With an established ad tier and a live TV option, Hulu beat a lot of competitors right out of the gate when building its CTV offerings.

YouTube: YouTube falls behind Hulu in US CTV ad spend with $3.29 billion, according to the same eMarketer forecast. YouTube has been aggressively building out its CTV capabilities, and has seen healthy growth in spend as a result.

Amazon: Amazon has a few CTV endeavors, including its Fire TVs, Prime Video, and Freevee. Until January 2024, Prime Video did not feature external ads. As it builds out the new ad platform, Amazon could very quickly become a successful contender due to its wealth of retail media data.

Roku: Roku is No. 4, but its share of US CTV ad spend is slipping as the playing field gets more crowded.

Netflix: Netflix, along with Disney+ and Max, are fairly new to ad-supported streaming. We project Netflix’s ad revenues will reach $830 million in 2024.

Disney+: Another newcomer, Disney+ has the advantage of leveraging some of its fellow Walt Disney Co. property Hulu’s ad expertise. Ad revenues for Disney+ are projected to reach $750 million in 2024.

Max: The platform formerly known as HBO Max combined with Discovery+ to become Max in April 2023.

Apple TV+: Apple TV+ doesn’t have an ad-supported tier yet.

The most important terms related to CTV: 

  • Over-the-top (OTT): OTT video refers to streaming video content that is provided over the internet and bypasses traditional distribution of a set-top box.
  • Free ad-supported streaming TV: Streaming TV that is available without paid subscriptions and features ads, such as Freevee.
  • Ad-supported video-on-demand: Streaming TV that features advertisements, such as Hulu’s ad-supported tier.
  • Smart TV: A TV that is connected to the internet on which a user can stream CTV content.