CTV advertising: what connected TV is, where the inventory comes from, and the budget it needs

CTV advertising is buying ads inside streaming television that plays on a television screen: the ad supported tiers of the big subscription services, the free channel apps built into the set, and the streaming sticks and boxes plugged into it. It is bought like digital, in an auction or against an insertion order, targeted by audience and geography and reported by software. It is delivered like broadcast, as a 15 or 30 second spot on the largest screen in the house that the viewer sits through. That combination is both the appeal and the difficulty: you get television's attention with digital's targeting, and you give up the click that every other digital channel taught you to measure on.

Two words get used as though they mean the same thing. CTV describes the screen, a television connected to the internet. OTT describes the delivery, video sent over the internet rather than through an aerial or a cable. So CTV is the part of OTT that happens on a TV set, and phone and tablet inventory is OTT but not CTV. It is cheaper, it behaves differently, and it often sits inside a plan sold as connected TV. Ask which of the two is in the number you are quoted.

Where the inventory actually comes from

Three routes reach the same screen, and they are bought in three different ways.

Route	What you are buying	How you buy it	What to settle first
Ad tiers of the subscription streamers	Spots inside shows and films on a service people pay to use	The service's sales team, its self serve tool, or a private deal through a buying platform	The minimum spend, and how frequency is held down when you buy two services separately
Free ad supported channels and the TV platform itself	Linear style channels, on demand libraries, and sometimes the home screen of the set	Platform self serve tools, or a buying platform	An inventory list you can read, since the content here is wider and less consistent than a streamer's catalogue
Programmatic, open market or curated	Impressions gathered across many apps and channels	A demand side platform, your seat or an agency's	Which apps are in the deal, and how repeat serves into one household are capped

Most plans are a mix of all three. A useful media plan names the apps and the share of budget going to each, rather than a channel called CTV with one number beside it.

How it is bought, and how it is measured with no click

Inventory is sold on a CPM, the price of a thousand impressions. Most spots are non skippable, in 15 and 30 second lengths. The delivery numbers that come back are impressions, completion rate, reach and frequency, and those describe whether the ads were seen. Agree the measure of what they did before the first spot runs.

• A geographic holdout is the strongest and the cheapest to run. Choose markets to run in and comparable markets to leave alone, then compare orders, enquiries or branded search between them over the same weeks.
• Branded search volume and direct traffic, read market by market rather than nationally. Both move early and both come out of your own analytics.
• A code or short URL used only in the television creative. It undercounts, because the usual response to a TV ad is a search for your name, so read it as a floor.
• Frequency distribution rather than average frequency. An average of four hides the households that saw it twenty times, which is wasted money and an irritated audience.

Creative is part of the buy. A cut made for a phone feed fails on a ten foot screen: the type is small, the brand arrives too late, and the audio is mixed for a speaker nobody is using. Specify legible type at distance, the brand present early, a clean mix and captions.

The arithmetic that decides whether the budget is big enough

Run it in this order and the decision makes itself. Decide how many households you need to reach and how many times each should see the ad, then multiply: households times frequency gives impressions. Divide by a thousand, multiply by the CPM you were quoted, and you have the budget the plan requires.

The shape of it, using 40 dollars as a placeholder until you have a real quote in hand: ten thousand dollars buys 250,000 impressions, and at a frequency of four that is around 62,500 households in the month. Put your own CPM in and look hard at the household number that falls out. If it is a small fraction of the market you are trying to move, the budget is the thing to fix rather than the channel. A floor is not a round number somebody quotes you; it is whatever buys a meaningful share of your target audience enough times to be remembered.

This arithmetic is written for a US buy of a few tens of thousands of dollars a month, placed self serve or through an agency. An annual commitment negotiated directly with a broadcaster runs on agreed rate cards instead, so the reach is negotiated rather than calculated.

CTV, YouTube and linear television

	CTV	YouTube	Linear television
Where it plays	The television set	Mostly phones, with a large and growing share on the television	The television set
Skippable	Mostly not	Much of it, after five seconds	No
Priced on	CPM	CPM, or cost per view	Cost per thousand against an audience estimate
Targeted by	Audience and geography, at household level	Audience, interest and search behaviour, at account level	Programme, daypart and region
Strongest at	A defined audience, on a big screen	Cheap reach, plus direct response from those who click	Mass reach in one market, fast

One wrinkle worth knowing. YouTube watched on a television is connected TV by any sensible definition, and it is bought inside Google's own tools rather than from the streaming sellers. A plan presented as connected TV can be mostly that, which is a reasonable buy and a different one. Ask for the split.

What to ask before you sign

• The app and content list, and whether each line is an open market buy or a named deal.
• One frequency cap across the whole buy, and how it is enforced when three apps serve the same living room.
• App level delivery reporting rather than a single rolled up figure.
• The share of impressions landing on phones and tablets, stated as a number in the plan.
• The measurement plan in writing, with the holdout markets named before launch.
• Invalid traffic checks, and who pays for impressions found to be invalid.

Fees, seat ownership and the questions that expose margin between your budget and the publisher work the same way whatever the inventory is, and our page on programmatic display agencies goes through them.

Questions that come up when a connected TV plan lands on your desk

What does CTV stand for?

Connected TV: a television connected to the internet, whether through the set's own software, a streaming stick or box, or a games console. CTV advertising means the ads served to video on that screen.

What is the difference between CTV and OTT advertising?

OTT is any video delivered over the internet rather than by broadcast or cable, including on a phone. CTV is the subset that plays on a television set. The screen is the difference, and it changes attention, completion and price.

Who are the main CTV advertising platforms?

Four groups, and most plans touch more than one. The ad tiers of the large subscription services. The device and TV platforms, including Roku, Amazon Fire TV, Samsung, LG and Vizio. The free ad supported services such as Tubi, Pluto TV and the Roku Channel. And the demand side platforms used to buy across all of them, including The Trade Desk, Google Display and Video 360, Amazon DSP and Viant.

Is connected TV worth it for a mid sized advertiser?

It fits when you have a defined audience, a product that benefits from being seen rather than searched for, and a budget that reaches a worthwhile share of that audience several times. It is a poor fit as a small test line beside search and social, because a thin TV budget buys a sample of the audience at television prices.

How do you tell whether it worked?

Hold out comparable markets, then read branded search, direct traffic and orders in the exposed markets against the held out ones over the same period. Set that up before the campaign starts, because the comparison only exists if the holdout was chosen in advance.

The lift lands somewhere other than the report

Every honest measurement plan for this channel accepts the same thing: the campaign pays off somewhere the campaign cannot see. A viewer watches the spot, does nothing for two days, then goes looking, and the delivery report has no field for that. Branded search is the usual place it surfaces. The newer place is an assistant: the same person now puts the category question to ChatGPT or Gemini and gets three companies back with a reason for each, and whichever ones are named inherit the demand the spot created. That belongs on the pre flight checklist beside the holdout markets. Record which companies the assistants name for your category before the flight, then again after it, and you have a read on where the attention went that no completion rate will give you. Keeping that record is what AI Knows Us does, at aiknowsus.com.