Eight Ways Programmatic and CTV Advertising are Converging

Executive Summary

The convergence of Connected TV (CTV) and programmatic media buying represents a transformative shift in advertising, merging television’s broad reach with the precision and flexibility of digital advertising. As consumers increasingly adopt streaming platforms and cut the cord on traditional TV, CTV has become a vital channel for advertisers seeking to engage audiences in premium, brand-safe environments. Programmatic technology enables real-time optimizations, granular audience segmentation, and dynamic creative adjustments, driving impactful campaigns that deliver measurable results.

Addressable advertising on CTV enhances relevance by tailoring ads to specific households, leveraging first-party data to minimize wasted impressions and maximize return on investment. With its high viewability and ad completion rates, CTV offers superior performance metrics compared to traditional digital formats. Enhanced transparency, cross-device attribution, and ongoing industry standardization further solidify CTV as a cornerstone of modern programmatic strategies.

While competition for premium inventory and rising CPMs underscore CTV’s value, these dynamics also present challenges. Advertisers must navigate platform fragmentation, finite inventory, and evolving data privacy regulations to maintain effectiveness. Integrating CTV into cross-platform campaigns ensures cohesive messaging, extending reach and complementing traditional linear TV while targeting younger, cord-cutting demographics.

1. Increasing Adoption of Programmatic CTV

CTV has become a central channel for programmatic advertising, with ad spend in this category projected to grow significantly. This growth is fueled by shifting consumer behaviors, such as cord-cutting and the widespread adoption of streaming services.

• Automated Buying at Scale: Programmatic technology allows advertisers to buy CTV inventory efficiently and at scale, ensuring real-time optimizations that align with campaign goals.
• Rise of AVOD Platforms: Advertising-supported video-on-demand (AVOD) platforms like Hulu, Roku, and Peacock are expanding their programmatic offerings, providing premium inventory to brands looking to connect with engaged audiences.

2. Enhanced Targeting and Personalization

CTV combines the mass reach of television with the precision of digital targeting, making it a powerful tool for advertisers.

• Granular Audience Segmentation: Advertisers can use first- and third-party data to target specific audience segments based on demographics, interests, and viewing habits.
• Household-Level Targeting: Unlike traditional TV, programmatic CTV enables household-level targeting, ensuring that ads are relevant to individual viewers.
• Dynamic Creative Optimization (DCO): Programmatic CTV allows for real-time adjustments to creative based on audience data, delivering personalized messaging that drives higher engagement.

3. The Shift to Addressable Advertising

Addressable advertising on CTV allows advertisers to serve different ads to different households watching the same content, creating tailored experiences.

• Integration with First-Party Data: Addressable CTV enables advertisers to leverage proprietary data to build custom audience segments, which is critical as third-party cookies phase out.
• Better ROI: By delivering ads to only the most relevant audiences, addressable CTV minimizes wasted impressions and increases return on investment.

4. Increased Transparency and Performance Measurement

CTV’s programmatic evolution has brought improvements in transparency and measurement, addressing historical concerns about ad fraud and limited data visibility.

• Viewability and Completion Rates: CTV offers higher viewability and ad completion rates compared to other digital formats, as viewers are less likely to skip ads on larger screens.
• Cross-Device Attribution: Advanced measurement tools enable advertisers to track the impact of CTV ads across multiple devices, providing a more comprehensive view of campaign performance.
• Standardization Efforts: Industry bodies like the IAB are working to standardize CTV measurement metrics, improving confidence in programmatic buying.

5. Programmatic CTV and Brand Safety

CTV offers a safer environment for programmatic ads compared to open web advertising.

• Premium Inventory: Most CTV ads run on premium, curated content from trusted streaming platforms, reducing the risk of appearing alongside inappropriate or low-quality content.
• Programmatic Private Marketplaces (PMPs): Many CTV transactions occur in private marketplaces, where advertisers can control inventory quality and brand safety.

6. Driving Growth in Cross-Platform Campaigns

CTV plays a key role in enabling seamless cross-platform campaigns that combine linear TV, CTV, and other digital formats.

• Omnichannel Strategy: Programmatic technology allows advertisers to manage and optimize campaigns across platforms from a single interface, ensuring consistent messaging and frequency control.
• Complementing Linear TV: As linear TV audiences decline, CTV extends reach to younger, cord-cutting demographics while maintaining the immersive experience of traditional television.

7. Impact on CPMs and Inventory Pricing

The demand for CTV inventory has driven up CPMs (cost per thousand impressions), making it one of the most valuable programmatic channels.

• Higher CPMs Reflect Value: While CTV CPMs are higher than display or video ads, the quality of engagement and premium environment often justify the cost.
• Competition for Inventory: As more advertisers shift budgets to CTV, competition for inventory on top-tier streaming platforms has intensified, requiring strategic planning and negotiation.

8. Challenges in Programmatic CTV

Despite its benefits, CTV’s growth in programmatic is not without challenges:

• Fragmentation of Platforms: The proliferation of streaming platforms creates challenges in managing and optimizing campaigns across a fragmented ecosystem.
• Limited Inventory Supply: Premium CTV inventory is finite, leading to competition among advertisers and higher costs.
• Data Privacy Regulations: As CTV relies heavily on data-driven targeting, advertisers must navigate privacy regulations and ensure compliance.

Strategic Implications for Advertisers

1. Invest in Premium Inventory: Focus on AVOD platforms and programmatic PMPs to secure high-quality placements.
2. Leverage First-Party Data: Build robust data strategies to maximize targeting precision and relevance in a post-cookie world.
3. Adopt Omnichannel Campaigns: Integrate CTV with other media channels to create cohesive and impactful campaigns.
4. Monitor Performance Closely: Use advanced measurement tools to evaluate the effectiveness of CTV ads and make data-driven optimizations.
5. Be Prepared to Adapt: Stay ahead of industry trends, such as standardization efforts and new privacy regulations, to maintain a competitive edge.

CTV’s integration into programmatic advertising represents a significant shift in how brands approach audience engagement. By harnessing its potential, advertisers can achieve precision, scale, and effectiveness in their media strategies. The integration of CTV and programmatic media buying offers advertisers unprecedented opportunities to achieve precision, scalability, and engagement. By investing in premium inventory, leveraging first-party data, and adopting an omnichannel approach, brands can maximize the potential of CTV in their media strategies. Staying ahead of industry trends, addressing challenges like fragmentation and privacy regulations, and focusing on transparency and measurement will be critical to success. As CTV continues to redefine audience engagement, advertisers who embrace its capabilities will lead the way in crafting impactful, future-focused campaigns.