Marketers have long recognized connected TV (CTV) for its impact on building brand awareness — but it’s now an undeniably effective vehicle for hitting performance KPIs, too. With improved targeting and engaging ad formats, CTV in 2025 will keep gaining traction as a top revenue-generating performance channel with more direct conversions. But what’s driving this explosive growth? Let’s explore the CTV trends that are solving pain points and opening doors to measurable advertising success.
Optimize your CTV strategy with the right targeting methods
While mobile and web marketing strategies zero in on reaching individual users, CTV is a different ballgame. Because a single device can serve very different people under the same roof, CTV requires a different approach. CTV players are seeking sophisticated personalization that respects privacy. We’re seeing a growing reliance on contextual signals, first-party data, and IP addresses.
Looking at our recent report with AdExchanger, each of the leading addressability solutions for publishers and advertisers check these privacy requirements. But let’s dig into the top three: contextual targeting, seller-defined audiences, and cohort-based targeting
Contextual targeting
Delivering relevant, personalized CTV ads relies heavily on contextual targeting. Traditional contextual targeting uses keywords and basic categorization about content to select the most relevant ads. But we’re in a new era — modern contextual targeting methods use AI and machine learning to analyze the actual content and context of where an ad appears. Marketers can then target a viewer’s immediate needs and interests with specific messaging. This leads to a more relevant ad experience and improves engagement and conversion rates.
Automatic Content Recognition (ACR) is another advancement currently gaining traction in this field, allowing the delivery of highly contextual ads based on current content being viewed. Think of ACR as next-level contextual that can identify not just streaming content but also products in a video. ACR samples parts of video content and matches those with its product database. For example, if a scene depicts a TV character applying makeup, the next ad break might promote a beauty brand’s new mascara.
Seller-defined audiences
When publishers create customized audience groups for advertisers to market to, these are seller-defined audiences. They provide exact targeting while staying within the boundaries of privacy regulations by bundling information about specific audiences into deal IDs. Advertisers can still see aggregated audience data (e.g., “tech-savvy grandparents”) without knowing the exact details about individual users.
Cohort-based targeting
Cohort-based targeting plays a central role in personalization since it allows segmentation based on the anonymized interests of larger groups of viewers (AKA cohorts). This solution respects privacy while enabling advertisers to effectively target viewers based on shared interests within a group instead of an individual’s attributes.
Better user experiences thanks to CMPs
Right now, websites and mobile apps have made opting in and customizing data-sharing preferences as easy as just a few clicks or taps.
But this same consent process on CTV is less straightforward. If you’ve ever tried typing in your email address using a TV remote, you understand why the industry is moving toward secondary services called consent management platforms (CMPs). CMPs offload the process of opting in to an external tool. This complies with the IAB’s Transparency and Consent Framework (TCF v2.2) standards, as it maintains data privacy. Even so, opting out remains a hot issue since it can sometimes be a more complicated user experience.
In practice, enabling low-friction and future-proof growth will call for versatile and privacy-safe identity management approaches that can easily adjust to the needs and specifications of multiple media environments.
As CTV uses both the ad-supported video on demand (AVOD) and hybrid subscription models, full adoption of CMPs will happen sooner rather than later.
Driving conversions with interactive ads
Personalized ad experiences are crucial in converting viewers. But the abundance of new, engaging ad formats is also a key factor.
Interactive shoppable ads allow viewers to make direct purchases and QR code integrations that let viewers interact with brands in real time — effectively boosting conversion rates.
According to eMarketer, 7% of US adults have made a purchase through a CTV platform. This might sound small, but we should expect this number to rise because more than half (53%) of CTV viewers wish all TV ads had a quick option to buy, and 63% wish they could see brands’ inventory from their television.
This desire to see quick options to buy ties in nicely with the phenomenon of second-screen usage. This year, 206.3 million CTV users are using a second digital device to browse while watching television, and many are already second-screen digital buyers, meaning they’re using these mobile devices to buy things they see on TV and contributing to the growth of m-commerce and conversion rates.
The future of CTV looks golden
2025 looks to be a booming year for CTV. Once the industry creates standards for allowing viewers to control their data privacy settings, it can move beyond its growing pains and maximize its potential for creating immersive ad experiences.
Already, all the interactive elements in play — think QR codes, shoppable ads, and SKOverlay formats — are enhancing viewer engagement and driving ROI. Expect more advanced contextual advertising and cutting-edge technologies such as Automatic Content Recognition to play crucial roles in how CTV meet the demands of today’s audiences while also building a more sustainable advertising ecosystem.
