CTV advertising: A marketer’s guide and the Spotify opportunity

CTV (Connected TV) has reinvented how audiences consume visual media—it’s personalised, on-demand, and interactive. Here at Spotify, it’s extending the streaming experience beyond mobile, tablet, and desktop, and onto the biggest screen at home. It’s also opening up new ways for advertisers to run video ads on Spotify. And, compared to social media, it’s a channel that even tariff-wary marketers are reluctant to cut back on.

Let’s look at the core elements of CTV ads and how they can help you zero in on your audience with video content that hits hard. ‎
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Streaming into the future—what are CTV ads?

CTV ads are delivered via internet-connected devices that stream video content—smart TVs, gaming consoles, and TV OS platforms like Roku. They blend the precision of digital advertising with the scale and immersive power of broadcast media.

In the US alone, CTV is projected to reach 238 million viewers in 2025, making CTV ads a key disruptor mechanism for marketers. Unlike traditional ads, which rely on broad targeting and deliver limited data, streamed CTV ads enable brands to get in front of micro-targeted audiences at the precise moments they’re dialled into their favourite content.

These data-rich CTV environments make it possible to engage audiences based on mood, mindset, or even real-time activity. Spotify is a great example, as we leverage first-party data to analyze user behaviour—podcast selections, viewing/listening times, genres, etc.

This means the ads delivered via CTV are more relevant, more impactful, and more effective at driving traffic. ‎
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How popular is CTV advertising?

According to Statista, “The first half of the 2020s has seen connected TV seamlessly become the ‘new normal’ in TV advertising,” with a projected spend of $38bn by 2027—up from $29bn in 2024. So it’s a medium that’s clearly made an indelible impression on marketers.

The fact that EMarketer predicts that connected TV will be the digital advertising strategy to be least affected by tariffs in 2025—a 12% cutback on CTV vs 41% on social media—also tells us a lot about just how vital a part of broader brand marketing it’s become.

That’s down to the high effectiveness and widespread reach of CTV advertising (77% of U.S. viewers watch their favourite content on CTV weekly), general increased streaming consumption (678 million+ Monthly Active Users and counting on Spotify alone), and global market expansion of the CTV medium.
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Breaking down the format—what do CTV ads include?

1. Advanced targeting

One of the major benefits of CTV is its precision targeting capability. This goes way beyond the broad audience targeting that traditional TV advertising offers to brands.

2. Variety of ad formats

CTV advertising can be delivered in different formats: pre-roll (before the content for guaranteed impressions), mid-roll (during the content for high engagement), or post-roll (after the content ends for low intrusion with qualified audiences). Not to mention interactive ads, which invite direct audience engagement.

3. Measurement and analytics

The sophistication of CTV ad measurement tools means brands can track engagement metrics like impressions, clicks, and even conversions. This makes ROI analysis more accurate and future planning more reliable.

4. Programmatic buying

Just like other digital advertising formats, CTV enables programmatic buying. So, ads can be automatically placed through ad exchanges like the Spotify Ad Exchange. We partner with DSPs such as The Trade Desk, Display & Video 360, Magnite, and LiveRamp to bring advertisers enhanced access to Spotify inventory across all core formats, including audio, video, and display. This makes the ad buying process more seamless and flexible, and helps optimise campaigns based on performance.

5. Audience fragmentation

CTV appeals to a way more diverse group of viewers than traditional cable, so brands can tap into super-specific niche audiences that may be unavailable to them via standard broadcast channels. Perfect if you’re looking to reach cord-cutters or younger, tech-savvy demographics who are moving away from traditional TV. Gen Z is Spotify’s fastest-growing cohort of users—check out our Culture Next report to learn more about how they’re driving culture on and off our platform. ‎
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How does CTV advertising work?

CTV platforms deliver ad-supported content by dynamically inserting ads into the content stream. When a user tunes into their favourite CTV content, they’ll be targeted with data-driven video ads.

Advertisers start by choosing their target audience—demographics, behaviours, location, viewing habits, etc. The ads are then purchased through automated delivery, or “programmatic,” platforms, which analyse audience data in real time to deliver the right ad to the right user.

The ads are then delivered as users stream content, either pre-roll, mid-roll, or post-roll, and they appear in high-resolution, full-screen formats, providing a premium, TV-like experience.

During the campaign, brands get real-time metrics like impressions, completion rates, click-through rates (if interactive), and attribution data (i.e., who took action after seeing the ad). So they can track and optimise their campaigns quickly and with razor-sharp precision—something they can’t do with traditional TV. ‎
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CTV vs OTT advertising

If you’ve already explored CTV advertising a little bit, you may have come across the term OTT advertising. And you may have wondered how it differs from CTV advertising.

It’s pretty simple. OTT (Over-the-Top) ads are delivered via streaming services that are accessed over the internet. CTV ads relate specifically to ads being delivered over CTV platforms, like Roku. So, while all CTV ads are also OTT ads, because connected TV is delivered over the internet, not all OTT ads are CTV ads, because they’re also delivered on other devices (e.g., smartphones, desktop apps, and in-car systems).

Spotify does both.

That’s because we deliver audio, video, display and other ad formats over the internet, making our platform a textbook example of an OTT service. But if the user is accessing Spotify through a smart TV or gaming console, then that overlaps into CTV territory.

The reason brands are particularly excited about CTV ads in the wider OTT pool of options is that it offers the premium, big-screen experience that really wows audiences. Like TV used to do, but with more relevance and impact. ‎
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Spotify and Roku: CTV advertising realised

Spotify’s partnership with Roku—the most popular TV streaming platform in the U.S., Canada, and Mexico—allows advertisers to deliver Video Takeover ads via the Spotify app on the Roku platform, and we’ll soon be adding more video ad products like video podcast ads. There are now over 300,000 video podcasts on Spotify, which gives an idea of the ROI potential this partnership unlocks for brands who want to reach our engaged global audience of over half a billion users.

If you’re looking to spend your ad budget wisely, you may wish to put CTV at the top of your media buying list.