The connected TV (CTV) advertising market is at a pivotal moment. Despite impressive growth in ad-supported streaming revenues—streaming ad revenue in the U.S. reached $3.8 billion in Q3 2024, up 50% year-over-year, according to MoffettNathanson—the industry is underperforming when it comes to delivering the seamless ad experiences viewers now expect.
At the same time, the world of television is undergoing a seismic shift. For the first time, eMarketer predicts that digital video will attract more upfront spending than primetime linear TV in 2024. Digital upfront spending is set to soar by an additional $5.06 billion, fueled by Amazon Prime Video’s ad tier, the migration of live sports to streaming services, and the rising influence of platforms like TikTok in securing upfront commitments.
This transformation is positioning CTV at the forefront of a digital advertising revolution. For brands and marketers, understanding the history, challenges, and potential of CTV is essential for staying ahead in this rapidly evolving space.
A Brief History and Rapid Growth of Connected TV
CTV’s roots date back to the 1990s with Internet Protocol Television and TIVO, but its true rise began in the 2000s with the launch of on-demand pioneers like Netflix (2007) and Hulu (2008). These platforms popularized on-demand content delivery and laid the foundation for today’s CTV ecosystem. Over the past decade, linear TV viewership has declined sharply, from an average of 4 hours and 37 minutes per day in 2012 to a projected 2 hours and 46 minutes in 2024.
This shift reflects evolving viewer habits. Today’s audiences demand high-definition streaming, personalized recommendations, and seamless integration with smart devices. These advancements have made CTV the preferred medium for content consumption, and advertisers have taken notice.
According to Statista, U.S. CTV ad spending is projected to reach $27.47 billion by 2025. In the UK, programmatic CTV ad spending is expected to hit £1.96 billion by 2025, accounting for 93.6% of all CTV ad spend. These numbers underscore the growing importance of CTV in the global advertising landscape.
The Challenge: Outdated Ad Models in a Modern Era
Despite CTV’s rapid growth, its advertising strategies have struggled to keep pace with viewers’ expectations. Free ad-supported streaming services (FASTs) saw ad loads peak in 2023 at just over 9 minutes per hour, only to decline slightly in 2024. Even more concerning, less than two-thirds of available ad slots are filled, leaving viewers stuck with repetitive filler messages like “we’ll be right back.”
This outdated approach to advertising fails to align with the binge-worthy, ad-free experiences viewers have grown accustomed to on platforms like Netflix and Disney+. Instead of innovating, ad-supported platforms have remained tied to traditional models that disrupt rather than complement the viewing experience.
Signs of Change: A New Approach to CTV Advertising
In a recent interview, Zack Rosenberg, CEO of Qortex, highlighted how the ad-supported streaming market can finally catch up to modern viewer expectations. Qortex has been leading the charge with innovative “on-stream” ads—less intrusive formats designed to enhance the viewing experience rather than interrupt it.
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What Are On-Stream Ads?
Unlike traditional ad formats that pause or disrupt content, on-stream ads integrate seamlessly into the programming, creating a more natural and engaging experience for viewers. Powered by artificial intelligence, these ads analyze video content frame by frame to match the tone, context, and sentiment of the moment.
This real-time, contextual approach ensures ads feel relevant and non-disruptive, significantly reducing viewer frustration. For FAST platforms, on-stream ads also unlock underutilized ad inventory, expanding monetization opportunities and improving ROI.
The Benefits of On-Stream Ads for Viewers and Advertisers
The adoption of on-stream ads represents a win-win scenario for both viewers and advertisers.
- For Viewers: The experience is less disruptive, more personalized, and better aligned with their content consumption habits.
- For Advertisers: Engagement rates are higher, targeting is more precise, and inventory utilization is improved, leading to better campaign performance.
This innovation is helping FAST platforms compete more effectively in the crowded streaming market, offering an enhanced viewing experience while driving revenue growth.
Why Now is the Time to Invest in CTV
The rise of CTV is not just a trend; it’s a fundamental shift in how audiences consume media. This transformation offers brands unparalleled opportunities to engage their target audiences.
CTV advertising holds several advantages over traditional linear TV:
- Advanced Targeting: Advertisers can deliver ads tailored to individual viewers based on demographics and behavior, providing unmatched precision.
- Interactive Features: Shoppable ads, QR codes, and pause screen ads engage viewers directly, boosting interaction and conversion rates.
- Real-Time Analytics: CTV platforms provide detailed metrics on engagement and ad performance, allowing for continuous campaign optimization.
- Premium Content Access: Platforms like Peacock, Paramount+, and Disney+ offer exclusive inventory, connecting brands with highly engaged audiences.
As ad-supported streaming continues to grow, these features will become essential for advertisers looking to remain competitive.
The Road Ahead for Connected TV Advertising
As we approach 2025 and beyond, the potential for on-stream ads to revolutionize the CTV landscape is undeniable. Partnerships like Qortex and Zype are driving the industry forward, leveraging AI and advanced technologies to redefine what advertising can look like in the streaming era.
CTV is also poised for further innovation, including shoppable TV, enhanced programmatic buying, and improved signal fidelity for better targeting and measurement. By 2028, U.S. CTV ad spend is projected to rival that of linear TV, solidifying its place as a cornerstone of modern advertising.
For brands and marketers, the message is clear: CTV is no longer optional. It’s a must-have component of any comprehensive media strategy.
Interested in how on-stream advertising can improve your campaigns? Book a time to explore Intelligent Video Analytics (IVA) with Qortex today.
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