Connected TV is reshaping how brands reach shoppers before they search. This guide explains what CTV is, how it works, and why it’s becoming essential for retail media strategies.
What Is Connected TV?
A Connected TV (CTV) is any television that connects to the internet to stream content. This includes:
- Smart TVs with built-in streaming apps (Netflix, Disney+, Amazon Prime Video)
- Streaming devices plugged into traditional TVs (Roku, Amazon Fire TV Stick, Apple TV, Google Chromecast)
- FAST channels (Free Ad-Supported Streaming Television) like The Roku Channel, Pluto TV, and Tubi
Unlike traditional cable or satellite TV, connected TVs deliver content over the internet. This enables programmatic advertising. Ads can be targeted to specific households and measured in real time.
The Scale of CTV Today
Streaming has become the primary way Americans watch television. According to Nielsen’s The Gauge, streaming captured 44.8% of all US TV viewing in May 2025. This surpassed the combined share of cable (24.1%) and broadcast (20.1%) for the first time. This represents a historic shift in how audiences consume video content.
For marketers, this means your audience is increasingly watching content on internet-connected devices rather than traditional broadcast or cable. If you’re still buying linear TV to reach them, you’re missing nearly half your potential audience. CTV is where you need to be.
What Is CTV Advertising?
CTV advertising means running video ads within streaming content on internet-connected televisions.
Instead of booking programming slots weeks in advance (like traditional TV), CTV allows you to:
- Target specific households based on data signals
- Reach audiences programmatically in real time
- Measure impressions, video completion, and downstream actions immediately
- Adjust campaigns as they run
This programmatic approach makes CTV fundamentally different from linear TV, where ads run on a fixed schedule and measurement comes weeks after the campaign ends.
CTV vs. Other Video Advertising Formats
CTV Advertising vs. Linear TV Advertising
Linear TV is traditional broadcast or cable programming. You buy airtime in advance, select programming or time slots, and target based on estimated audience demographics. Measurement comes from Nielsen ratings and post-campaign analysis.
| Capability | Linear TV | CTV |
|---|---|---|
| Targeting Precision | Program/daypart-based | Household-level, audience-based |
| Measurement | Estimated reach (3-4 week delay) | Real-time impressions and conversions |
| Attribution | Impossible to trace ad to sale | Closed-loop with first-party retail data |
| Buying Model | Advance booking, fixed airtime | Programmatic, real-time bidding |
| Optimization Speed | 3-4 weeks for post-campaign analysis | Real-time bid and creative adjustments |
CTV Advertising vs. OTT Advertising
OTT (Over-The-Top) advertising includes all streaming video delivered via the internet. This includes content watched on phones, tablets, and laptops. Connected TV targeting is generally preferred for brand campaigns. The lean-back, high-attention viewing environment of big screens delivers better results.
CTV Advertising vs. Addressable TV Advertising
Addressable TV allows household-level targeting on linear TV. This only works on cable and satellite inventory. CTV goes further by applying addressable targeting across the full breadth of streaming inventory. You get better data, more flexible buying, and stronger measurement.
Benefits of Connected TV Advertising
Reach Cord-Cutters and Streaming-First Audiences
Millions of households no longer subscribe to cable or satellite. They watch exclusively on streaming platforms. CTV is the only way to reach these audiences on the big screen.
Precision, Audience-Based Targeting
CTV platforms allow targeting based on:
- Purchase behavior and shopping history
- Browsing activity and product interests
- Demographics and household income
- First-party retail data (if buying through a retail DSP)
Research shows that 84% of marketers report that CTV delivers superior audience targeting capabilities compared to traditional linear TV. This makes precision reach a proven competitive advantage.
High Video Completion Rates
Most CTV ads are non-skippable. Viewers cannot scroll past, mute, or close a tab on a TV screen.
Industry benchmarks show that CTV video completion rates exceed 95% on average. This ensures your full message reaches engaged audiences on the big screen.
Accurate, Real-Time Measurement and Attribution
Unlike linear TV, you see performance data as your campaign runs:
- Impressions and video completions
- Downstream actions (detail page visits, searches)
- Real-time visibility into performance
How Does CTV Advertising Work?
Step 1: Define Your Audience
Use audience data to identify who you want to reach:
- Customers who’ve purchased from you before
- People actively shopping in your category
- New-to-brand audiences you want to acquire
- Lapsed customers you want to re-engage
Step 2: Set Your Budget and Campaign Goal
Decide what success looks like:
- Awareness: Measure reach and video completion
- Consideration: Measure product page visits
- Conversion: Measure sales and new-to-brand purchases
Step 3: Build or Upload Your Creative
CTV videos are typically 15 or 30 seconds and non-skippable:
- Lead with your brand or product early
- Keep the message clear and focused
- Include a specific call to action
- Optimize for the big screen experience
Step 4: Launch and Activate
Use a Demand-Side Platform (DSP) like Amazon DSP to activate your campaign programmatically. The DSP matches your audience segments to available streaming inventory across platforms.
Alternatively, use self-service options like Amazon’s Sponsored TV for simpler campaigns with no minimum spend.
Step 5: Measure and Optimize in Real Time
Track performance data and make adjustments:
- Pause underperforming placements
- Increase spend on winning audiences
- Test different creative versions
- Adjust frequency caps if needed
How Are CTV Audiences Targeted?
CTV targeting works by matching data signals to streaming households. The available data depends on which platform you use.
First-Party Retail Data and AMC Audiences
If you’re buying CTV through a retail DSP like Amazon DSP, you access first-party shopping signals:
- Product browsing and search history
- Past purchase behavior
- Category interest
- Household income and demographics
Amazon Marketing Cloud (AMC) gives you access to first-party purchase and browsing data from millions of shoppers worldwide, allowing you to build highly specific audiences.
Behavioral and In-Market Targeting
Reach shoppers actively researching or buying in your category. These purchase signals build a more precise audience than demographics alone.
Lifestyle and Contextual Targeting
Define audiences by who they are (pet owners, home improvers, fitness enthusiasts) rather than just what they’ve bought. You can also align ads contextually to the content being streamed.
New-to-Brand and Retargeting Audiences
Use CTV to introduce your brand to shoppers who’ve never purchased from you, or retarget audiences who’ve already discovered your brand.
Key CTV Metrics to Understand
- Reach: The number of unique households that saw your ad.
- VCR (Video Completion Rate): The percentage of ads watched to completion. Most CTV ads are non-skippable, so expect 90%+ VCR.
- DPVR (Detail Page View Rate): The percentage of viewers who visited your product page after seeing the ad.
- NTB (New-to-Brand) Sales: The proportion of conversions from shoppers who’ve never purchased from you before. CTV is effective for market expansion.
- CPM (Cost Per Thousand Impressions): The price of serving 1,000 ad impressions. Most performance-focused campaigns land between $20-40 CPM, depending on audience precision and platform.
Standard ROAS reporting models can be misleading because they include sales that weren’t caused by the ad. Incrementality measurement isolates what wouldn’t have sold without CTV.
CTV and Retail Media
Connected TV is essential for reaching modern audiences. As streaming has become the primary way people watch television, brands that ignore CTV are missing nearly half their potential market.
CTV works best when paired with lower-funnel retail media. By combining awareness-building CTV campaigns with conversion-focused Sponsored Ads and DSP display, you create a complete full-funnel strategy that reaches audiences at every stage of their journey.
For detailed guidance on executing this full-funnel approach, including strategy, sequencing, and measurement, see our comprehensive guide: How Connected TV and DSP Power Full-Funnel Retail Media.
Executing CTV at scale requires coordination across audience data, creative, and retail outcomes. Pacvue’s Full-Funnel Media Activation platform helps teams orchestrate these strategies across their full retail media mix.
