The Rise of Connected TV: Opportunities and Challenges
In recent years, Connected TV (CTV) has revolutionized media consumption, transforming traditional television viewing into a dynamic, personalized experience. CTV refers to televisions connected to the internet, enabling users to stream content from platforms like Netflix, Hulu, and YouTube. This evolution has reshaped viewing habits and introduced new opportunities and challenges for advertisers and technology providers. In this article, we will explore CTV advertising opportunities and challenges in today’s media landscape.
The Growth of Connected TV
The adoption of Connected TV has skyrocketed over the past decade, fueled by technology advancements, the rise of streaming services, and changing consumer habits. According to eMarketer, by 2026 it’s estimated that 69.9% of the US population will be CTV users. Smart TVs, streaming devices like Roku and Amazon Fire Stick, and gaming consoles that support streaming platforms have become standard fixtures in homes across the nation.
One of the driving forces behind this shift is the increasing preference for on-demand content. Viewers prefer the flexibility to watch shows and movies at their convenience. In fact, eMarketer projects that the average CTV usage in the US will nearly double from 1 hour and 22 minutes in 2020 to 2 hours and 37 minutes in 2026.
With all this growth comes an ever-expanding landscape of CTV advertising opportunities and challenges—offering brands new ways to connect with audiences while navigating an increasingly complex ecosystem.
Opportunities for CTV Advertisers
Connected TV offers advertisers unique advantages:
- Enhanced Audience Targeting
CTV allows advertisers to reach highly specific audience segments based on demographics, interests, and viewing behaviors. CTV enables brands to serve relevant messages to a specific group of consumers, ideally improving engagement and ROI. - Dynamic and Personalized Ads
CTV also enables advertisers to deliver dynamic, personalized ads in real time. This means that ads can be customized based on the viewer’s preferences, behavior, or even time of day. For example, a food delivery service could advertise lunch specials around noon or promote late-night deals after 10 PM.
Personalized ads can be tailored to individual viewers based on their previous interactions or content consumption patterns. This creates a more engaging and relevant ad experience, translating into higher conversion rates for advertisers. - Cross-Device Integration
CTV enables advertisers to connect their campaigns across multiple devices. Brands can create cohesive strategies that follow consumers from their TV screens to mobile and desktop, reinforcing messaging and increasing conversion opportunities. - Data-Driven Measurement & Optimization
Another advantage of Connected TV advertising is tracking and measuring performance in real-time. Advertisers can monitor key metrics such as impressions, completion rates, and even website visits or purchases attributed to their campaigns, allowing for continuous optimization based on real-time data.
By leveraging data analytics, advertisers can optimize their campaigns based on real-time feedback, making adjustments to improve performance. This data-driven approach enhances ad effectiveness and allows advertisers to justify their spending with concrete results. - Flexibility & Cost Efficiency
CTV eliminates the need for long-term, high-cost TV commitments. Advertisers can launch campaigns with more flexibility, testing different creatives, audience segments, and budgets to optimize performance without heavy investment. - Innovations & Enhancements
Innovations in shoppable TV are bridging the gap between inspiration and purchase, transforming passive viewing into an interactive shopping experience. Enhanced platforms now allow viewers to seamlessly engage with ads—whether through QR codes, on-screen prompts, or direct click-to-buy functionalities—making it easier than ever to move from awareness to conversion.
Challenges in the CTV Landscape
Despite its many opportunities, Connected TV also comes with its challenges. As the space becomes more crowded and competitive, advertisers and tech providers must navigate these obstacles to succeed:
- Ad Fraud and Viewability Issues
One of the challenges advertisers face in the CTV space is the risk of ad fraud and viewability issues. Since CTV operates in a digital environment, it is susceptible to fraud schemes such as invalid traffic, where non-human actors (bots) artificially inflate view counts or ad impressions. Advertisers must partner with trusted platforms and use ad verification tools to mitigate this risk and ensure real audiences view their ads. - Fragmented Audience
The fragmented nature of CTV, with multiple streaming services and platforms, presents a challenge for brands. Compared to traditional TV, where advertisers can reach a large audience through a single network, CTV audiences are spread across various platforms, making it harder to get them all in one place.
For advertisers, this means developing strategies that span multiple platforms and devices to ensure their message reaches the right audience. - Walled Gardens and Data Silos
Many CTV platforms, such as Roku, Amazon Fire TV, and YouTube TV, operate as “walled gardens,” meaning they control their own data and limit cross-platform sharing. This creates challenges for advertisers who want a unified view of their campaign performance across multiple streaming services. Without open data sharing, brands may struggle to optimize campaigns holistically. - Content Saturation
With the rapid expansion of streaming platforms and ad-supported content, advertisers face increasing challenges in breaking through the noise to reach their target audience. The sheer volume of available content means viewers are often overwhelmed with choices, leading to fragmented attention spans and a higher likelihood of ad fatigue.
Additionally, as more brands shift their budgets to CTV, competition for ad placements intensifies. Advertisers must adopt strategic approaches—leveraging data-driven targeting, frequency capping, and creative optimization—to stand out in a crowded ad environment without oversaturating viewers or diminishing campaign effectiveness. - Subscription Fatigue and Ad-Supported Growth
As more streaming services emerge, consumers are reaching a limit on the number of subscriptions they’re willing to pay for. This has fueled the growth of ad-supported tiers (e.g., Netflix and Disney+ introducing ad-supported plans). While this presents a new opportunity for advertisers, it also means greater competition for limited ad inventory, potentially driving up costs and making it harder to secure premium placements.
The Future of Connected TV
The future of CTV advertising is filled with opportunities for brands that embrace innovation and adaptability. The rapid evolution of ad-supported streaming, advancements in audience targeting, and improved measurement solutions are unlocking new ways for advertisers to connect with engaged viewers. As platforms refine their technology and expand their ad capabilities, brands can leverage CTV’s data-driven insights to deliver personalized, high-impact messaging at scale.
Additionally, the rise of shoppable TV, interactive ad formats, and AI-driven creative optimization is transforming how brands engage with consumers, making advertising more seamless and actionable than ever before. While navigating the complexities of ad fraud, data fragmentation, and privacy regulations requires strategic investment, the brands that prioritize agility and transparency will be well-positioned for success. CTV is no longer just an emerging channel—it’s a dominant force shaping the future of video advertising, offering advertisers a powerful way to drive measurable results in an increasingly digital world.
Reach out to the LWD team to discuss CTV advertising opportunities and challenges for your brand!
Better planning & measurement start here. Let’s get to work!