Is the CTV Ad Market - Disappointing?
Where's the boom?
CTV is booming! Wait, are we sure about that?
Earlier this week, Madison and Wall reported that CTV advertising grew 5.9% in Q3 minus political ads
While 5.9% growth is solid, consider that Magna predicts that US advertising overall will grow 4.6% in 2026
Shouldn’t connected TV - given all the hype around the macro shift to streaming, and the idea that it represents the ultimate blending of TV and digital advertising, be blowing past macro ad spending forecasts? Especially considering that ad-supported streaming has only really been viable for a few years (remember, not long ago, you couldn’t advertise on Netflix, Amazon Prime, Disney+, HBO, etc.)
Plus, sports are supposedly the most valuable thing in media - and tons of sports rights are moving to streaming. Not to mention that connected TV - buoyed by generative AI - promises to bring thousands, if not millions, of new-to-TV advertisers to the medium.
Suddenly, 5.9% growth feels rather lackluster. Or is it me?
Maximize your YouTube advertising with VuePlanner. As a member of the YouTube Measurement Program for Brand Suitability and Contextual Targeting, VuePlanner enables you to buy with confidence, clarity, and precision. Using advanced technology and AI-powered optimization, VuePlanner offers custom-curated contextual collections, exclusive content strategies, and transparent reporting for measurable, impactful results. Take control of your campaign performance—partner with VuePlanner now.
First off, a major, major caveat is necessary here. Madison and Wall doesn’t count YouTube in its CTV growth - because the company says those budgets don’t come out of TV money. That’s a position that is very debatable in the industry.
Emarketer predicts that CTV ad spending in the US will jump 14% next year, before dipping closer to 11% by 2029. Those numbers do include YouTube, which has regularly been nabbing $10 billion in ads each quarter (not all of which is TV$, to be sure).
Still, during a panel on 2026 I moderated yesterday at the excellent Modern Media Summit hosted by Sabio in New York, eMarketer analyst Ross Benes said double digit growth will soon end, in part because of a flood of inventory and low prices.
“With CTV, the days of significant CPM growth are behind us,” Benes said. “Ad inventory will grow as fast, or even faster, than advertising demand. This means ad prices will continue to be flat or falling, with some exceptions. Advertisers can expect to access CTV viewers cheaper than they used to, but they will have to contend with more clutter as a tradeoff.”
The YouTube factor is interesting here. As you know, the company now regularly dominates CTV -and has eclipsed Netflix for months. (In fact, per Nielsen, Netflix has been stuck around 8% share of TV for a while - which might be a reason the company would entertain buying WarnerDiscovery).
October 2025
October 2023
Media consultant Caleb Pearson, who logged five years inside McDonald’s media division, said that the fast food giant’s TV spending was once roughly 80% linear, and now sits at around 10%.
Given that McDonald’s overall media spending hovers near $100 million annually in the US, that’s a dramatic shift - and the kind of thing that the CTV ad industry should feel. But alas, Pearson noted that at least during his tenure, YouTube was treated as separate from TV (and creators were far underutilized).
Meanwhile Danny Weisman, co-founder of the agency startup Obsessed Media, said he urges his clients to view YouTube as part of their connected TV spending…though too often they opt for ‘general’ YouTube campaigns, which end up pushing their brands to a lot of YouTube on mobile devices inventory.
I’m not saying that connected TV is in any kind of trouble, but you’d think that due to the sheer availability of inventory (through a growing number of ad tech intermediaries and self-serve platforms) that overall demand would be ballooning. Yet consider that:
Peacock’s recent ad revenue growth was anemic
At Fox, while Tubi’s ad revenue surged, overall the company warned of “an oversupply of premium digital video inventory and macroeconomic uncertainty.”
Ad revenue at Paramount+, Pluto and BET+ dipped 5.5% year-over-year. Think about that. Paramount has all these hot Taylor Sheridan shows, the NFL and other sports - and it’s plugged into various self-serve platforms. Shouldn’t it be at least growing, if not booming?
Shouldn’t CTV be booming more? I understand that Amazon’s push into an advertising-default for Prime has flooded the market with ad space, as have the thousands of FAST channels (NBCU just rolled out a 22 more!).
I’d argue that reach is also a problem on most of these services. Paramount and Peacock are only in so many homes, and can’t rack up reach numbers in short bursts outside of sports. Even Netflix’s ad tier is limited in that regard (think of how massive a watercooler moment Netflix just had on its hands with “Stranger Things,,,” how many homes in the US actually watched its return with ads?).
At the Summit yesterday, there was also a palpable frustration with CTV mechanics - a lack of transparency, clunky private marketplace deals that trade efficiency for audience delivery, and so on. Plus, as Weisman mentioned, too many performance brands see TV as something that is easy to cut.
That’s somewhat surprising, particularly when you think about:
How much ad tech investment there has been in CTV
How much ad tech companies like Magnite and Trade Desk tout their CTV growth
How much supposed innovation there has been around contextual CTV ad targeting as well as cross-platform measurement
You’d think this would be showing up a lot more in the revenue numbers.
Overall, things are far from dire in the connected TV space. But it’s hard no to wonder if this has all been a bit of a letdown. Or maybe its just quickly becoming YouTube and Amazon’s (ad) world.