2025 was the year streaming overtook linear TV. With 44.8% of TV viewing happening on streaming platforms, connected TV now leads cable and broadcast combined. For advertisers, this shift creates both opportunity and complexity.
CTV ad spend is projected to reach $33.35 billion in 2025, growing to nearly $47 billion by 2028. That's not experimental budget—it's a fundamental reallocation of television advertising dollars.
But CTV's promise of "TV impact with digital precision" requires AI to deliver. Here's how AI is actually transforming connected TV advertising.
Why CTV Requires AI
Traditional TV advertising was simple: buy demographics, hope the right people were watching. CTV is different. Fragmentation across hundreds of streaming services, apps, and devices creates complexity that manual buying can't manage.
Household-level targeting requires processing millions of data points in real-time. Creative personalization demands automated variation and optimization. Cross-device measurement needs AI to connect TV exposure to digital actions.
The result: 75% of all CTV transactions are now programmatic, up from a minority just a few years ago. AI-powered buying isn't optional—it's how CTV advertising works.
AI Applications in CTV
Audience targeting has evolved dramatically. CTV enables targeting based on viewing behavior, purchase data, demographic and psychographic profiles, geographic and contextual signals, and cross-device behavior connecting TV to mobile and desktop activity.
Programmatic buying automates the entire transaction. When a viewer clicks play, an ad request hits the programmatic marketplace. DSPs evaluate whether this viewer matches target criteria—all in under 100 milliseconds.
Creative optimization addresses CTV's unique challenge: the living room screen demands TV-quality creative, but digital efficiency requires personalization and testing. AI-powered DCO enables testing hundreds of creative variations simultaneously.
Measurement and attribution connect TV viewing to digital actions. CTV-exposed households convert 45% higher than unexposed households in some studies. AI traces these cross-device journeys.
The Platform Landscape
YouTube
The largest single streaming destination by time spent. Over 12% of total U.S. TV viewing. 36% of viewing happens on TVs. Massive reach with strong targeting through Google's data.
Netflix
94 million monthly global ad-tier users streaming 41 hours monthly. Reaches more 18-34-year-olds than any U.S. broadcast or cable network. Netflix Ad Suite launched in 2025.
Amazon Prime Video
Shoppable ads connecting TV viewing to purchase. NFL Thursday Night Football. Closed-loop attribution through Amazon's retail data—unmatched for e-commerce brands.
FAST Platforms
Pluto TV, Tubi, The Roku Channel reach ~111 million monthly U.S. viewers. Significant reach at lower CPMs than premium SVOD.
AI Tools for CTV
DSPs with CTV strength:
- • The Trade Desk (Kokai platform with deep learning)
- • Amazon DSP (Performance+ and Brand+ AI campaign types)
- • Viant (ViantAI planning assistant, strong CTV focus)
- • DV360 (Google's full-stack solution)
- • StackAdapt (accessible CTV for mid-market)
CTV-specific platforms:
- • tvScientific (performance-focused with outcome-based optimization)
- • MNTN (self-serve with QuickFrame AI for creative generation)
- • Innovid (interactive and shoppable CTV ad formats)
Implementation Framework
01Define objectives
CTV can drive awareness, consideration, or performance outcomes. Clarify goals before buying. Over half of CTV advertisers now prioritize sales, store visits, and leads over pure awareness.
02Audience strategy
Leverage first-party data for seed audiences. Layer contextual signals for privacy-compliant targeting. Use platform AI for audience expansion and lookalike modeling.
03Creative development
TV-quality creative is table stakes. Plan for multiple variations to enable AI optimization. Consider interactive and shoppable formats. Test 15-second and 30-second lengths.
04Channel mix
Don't treat CTV in isolation. Coordinate with display, social, and search for sequential messaging. Use CTV for awareness, retarget engaged viewers through other channels.
05Measurement infrastructure
Implement cross-device tracking. Connect CTV exposure to website visits, app installs, and conversions. Build incrementality testing into campaigns.
Best Practices
Embrace programmatic buying. Direct deals with individual publishers limit optimization potential. Programmatic enables AI to optimize across inventory sources, audiences, and creative in real-time.
Invest in creative variation. AI optimization requires options. A single creative limits what AI can test and learn. Develop multiple versions varying in message, tone, length, and call-to-action.
Test interactive formats. QR codes and shoppable elements show strong results. 41% of viewers who engage with shoppable streaming ads go on to purchase. Interactive CTV ads grab 12% more attention.
The bottom line: CTV advertising has reached maturity. U.S. CTV ad spend is projected to grow 13.3% in 2025 while linear TV decreases by the same percentage. AI makes CTV work at scale—the precision targeting, real-time optimization, and cross-device measurement that differentiate CTV all depend on AI capabilities. The living room has gone digital. AI is how you reach it effectively.
