• by Maarten Albarda , Featured Contributor, January 3, 2025

There is no doubt CTV is having a moment. It is also true that this “moment” offers both opportunity and threat all neatly bundled into one.

CTV is now available in over 87% of all U.S. households and takes up about a third of all viewing time, according to public data. And surprisingly, ad-free, premium CTV has a share of about 60% of all CTV viewing, meaning that only 40% of CTV audiences is exposed to ads within the CTV environment. However, this may start to shift as monthly cost for premium services keep on rising (ad-supported CTV is also getting more expensive, but is obviously cheaper versus premium offerings).

In a post earlier this year, I shared that reaching viewers on “television screens” (regardless of how the program is accessed) is getting harder, because networks and cable are losing audiences, while non-ad supported CTV grows faster than ad-supported CTV. And on top of that, ad-supported CTV self-imposes more strict limits on ad inventory vs traditional TV.

However, running ads on CTV is financially attractive, especially if you compare its cost vs network or cable TV. Wait, wait, wait, before you start admonishing me that the two are bought in a different way, and their performance can’t really be compared because one is independently measured (TV) and one is not (CTV).

You are right. CTV is measured by its proprietors through a fragmented, walled, non-transparent mess of metrics, or the metrics come from the programmatic platform deployed to buy CTV. The reported impressions are nothing but a gross (and grossly dumb) number of potential viewers, unduplicated, not reported or verified independently, and probably not meaningful in any way, shape or form. Good luck stitching performance together.

On top of that, the ad fraud industrial complex has certainly discovered how to siphon off large sums of money. fFaud runs the gamut of scammers deploying bot farms, fake devices, impression stacking, viewability fraud, ad injection, pixel stuffing and IP spoofing. Catching this is super hard and requires a constant game of whack-a-mole, aided by investments in tracking and reporting software and smart analysts. So that adds to the cost, obviously. With these challenges, it becomes easier to understand why CTV may not be the cost-effective opportunity it appears to be on casual inspection.

At the same time, though, it’s true that in order to buy a more or less comparable number of impressions for a similar target audience, the cost of CTV is about half or less vs a traditional TV campaign.

Why is this important? Because marketing budgets are under pressure (when were they ever not?).

According to Gartner’s CMO survey, marketing budgets are down 15% from 2023 to 2024, representing an average of 7.7% of total company revenue in 2024, down from an average of 9.1% in 2023. And because CMO’s are only human, they start looking for options to have their cake (“to be on TV”) and eat it too (“at a lower cost than network TV”). CTV ad revenue grew from around $17 billion in 2021 to an estimated $25 billion in 2023, driven in large part by marketers looking for an affordable video impression served on a TV device. It might not be TV advertising as we once understood it, but “on TV” it is, and that lure seems to still have a magic pull for marketers.

This post was previously published in an earlier edition of Media Insider.