Advertising, reimagined: How CTV is changing ad strategies across the board | Sponsored Content

If the last few years were the era of explosive growth for connected TV (CTV), this year will be remembered for its transformation. No longer a fledgling challenger advertising channel, CTV has narrowed the ad spending and viewership gaps considerably between itself and linear TV, absorbing more advertising budgets, and encouraging more streaming services—including the notoriously anti-ad Netflix—to unveil their own ad-supported tiers. All of this is happening as CTV technology advances by leaps and bounds, which is enabling advertisers to better target audiences, measure outcomes, and implement performance marketing strategies.

This upheaval doesn’t just impact streaming, either—it’s already transforming advertising at large, including linear TV and social media.

CTV’s ad renaissance

Streaming services are more ad-friendly than ever. Major players including Netflix, Disney+, and Max rolled out ad-supported offerings last year, a move that not only opened up more ad inventory, but increased viewership, too. An Insider Intelligence forecast suggests that US adults are doubling how much time they spend streaming, from about 1 hour daily in 2019 to more than 2 hours daily in 2024.

Much of this increased viewership will be ad-supported, as viewers continue flocking to these offerings in exchange for less expensive (or free) subscriptions. As streaming costs continue to rise, expect free ad-supported streaming TV and ad-supported video-on-demand services to climb as consumers opt into advertising in exchange for watching their favorite content more cost-effectively.

CTV’s impact on other ad channels

With both viewership and ad inventory growing rapidly, advertisers are coming around on CTV—and so are their investments. This year, CTV ad spending in the US is projected to hit $25.09 billion—up from $20.69 billion in 2022, according to Insider Intelligence. As expected, advertisers are building these budgets with resources from other ad buckets, with most of the re-allocated money coming from linear TV.

As a result, CTV and linear TV advertising are trending in opposite directions: By 2025, US CTV ad spending will be more than half of linear TV ad spending. Even with linear TV investments decreasing, Insider Intelligence still projects the amount spent on linear TV and CTV combined will grow from $86.40 billion in 2023 to almost $100 billion by 2027.

It’s perhaps no surprise that nearly half of marketers say they’re shrinking their linear TV budgets to invest in CTV, according to a study by Advertiser Perceptions and Premion. But linear TV isn’t the only channel affected; CTV’s ability to blend digital marketing’s targeting and measurement with linear TV’s high-impact imagery has led some advertisers to rethink which performance marketing channels are worth prioritizing. Some 36% of US marketers, surveyed by Statista, said they’ll fund CTV with money reallocated from other digital and mobile video channels, while 31% plan to pull from their social media ad spending.

For more CTV insights, check out Insider Intelligence’s Meet the Analyst Webinar, “Connected TV Advertising: Making Sense of a Shifting Landscape,” made possible by MNTN.