What will it take for CTV ad spend to overtake linear?

Currently, linear TV generates six times more ad impressions than CTV, even though viewers are splitting their time almost 50/50 between the two. So, is it merely a matter of time before ad spend catches up to viewing habits? Not quite. It’s all about where the money flows.

Check out this chart below, on the left. It’s a simplified version of the old adage for advertising made famous by Mary Meeker. In a nutshell, the theory is that marketer ad spend will always eventually catch up with consumer time spent on any particular media channel.

This view of the advertising world has outlived its usefulness – and accuracy. So, Kristin Sanford and I created the chart on the right. The idea is that marketer ad spend will always (eventually) catch up with consumer money spent. In particular, the media channel that’s closest to the point of purchase will win the biggest share of ad budgets.

CTV’s new playbook – follow the money

In my last article, I explained how this applies to paid search and retail media — and how agentic AI is next in line to capture the throne. None of those categories have much going for them in terms of time spent. In fact, they’d prefer you spend very little time and just get the information or products you need and be on your way.

But what about the TV space? The goal has always been to keep the viewer glued to the screen. The same has gone for online video, mobile video, social video, and, so far, streaming video.

To quote Timothée Chalamet, er, Bob Dylan, the times they are a-changin'...

The CTV powers-that-be have realized that they need to focus on money spent.

Looking at the companies currently raking in more than $1bn in CTV ad revenue, it’s clear they have money-spent advantages over linear TV – and I’m not talking about investment by the platforms themselves on content. Although they have a lot of that too.

Amazon and YouTube (via Google) have purchase and search data. Roku, Netflix, and Hulu (via Disney) have enabled data onboarding. And NBCUniversal (which owns Peacock) has TalkShopLive for video commerce, NBCU Checkout for transactions, Must ShopTV for interactive ad formats, and, most recently, shoppable live sport experiences in partnership with Walmart.

The CTV game plan: personalized ads, bigger brands, universal access

But publishing innovations alone won’t do the trick. CTV providers also need to ensure ads are more relevant for consumers. This is already happening with addressability and other forms of first-party data targeting. It’s also being done through creative personalization that dynamically renders ads based on what's most likely to engage audiences. And we’re seeing a closing of the loop to conversion aka money spent through new forms of measurement and verification. These are all the domain of ad tech platforms like Flashtalking by Mediaocean and Innovid.

The next critical step is amassing a large enough base of advertisers to ensure there’s a relevant brand to pair with every consumer in the moment. This is where Universal ads comes in creating an entry-level offering for premium video across A+E Networks, AMC Networks, DIRECTV, Fox Corporation, NBCUniversal, Paramount, Roku, TelevisaUnivision, Warner Bros. Discovery, and Xumo.

By making it easy for millions of small advertisers to buy CTV ads, these platforms will gain a larger pool of brands to match with ad calls. This, of course, has been Google and Meta’s recipe for success – well, that and getting as close as possible to consumer money spent.

So, back to the original question: what will it take for CTV to overtake linear in terms of ad spend?

The answer: just a few more years.