CTV Is Already in 83% of Homes. Why Aren’t Performance Marketers Keeping Up?

Fragmentation, fees, and fuzzy measurement are real. So is the performance upside. Here’s how to close the gap - a CTV 101 that simplifies what matters, and how to turn it into results.

by Jackie Pihonak

Here's a stat that should make every marketer pause: 83% of US households now subscribe to streaming services, yet many brands are still struggling to fully embrace Connected TV as a performance channel.

You know streaming video should be a bigger part of your media mix, but the ecosystem's complexity feels overwhelming. Between device fragmentation, measurement challenges, and the dreaded "CTV tax," it's easy to see why many marketers approach this channel with hesitation. Let's cut through the noise and establish the foundation you need to succeed.

Decoding the Acronym Soup

Before diving into strategy, let's establish clarity on the terminology that gets thrown around interchangeably:

• CTV (Connected TV) refers to the hardware: Roku devices, Apple TV, Fire Sticks, and smart TVs with built-in internet connectivity. This is your viewing canvas.
• OTT (Over-the-Top) describes the content delivery mechanism: video streamed directly over the internet, bypassing traditional cable or satellite infrastructure. Netflix, Hulu, and HBO Max are OTT services.
• OLV (Online Video) encompasses video advertising outside traditional or streaming TV environments. Think YouTube pre-rolls, in-app video, or social media video ads.

CTV is the screen, OTT is the pipeline, and OLV is everything else.

The Current Advertising Landscape

The streaming advertising ecosystem has exploded into multiple distinct channels, each with unique characteristics:

YouTube TV has become a quiet powerhouse, now the largest live TV streaming service with over 8 million subscribers. It represents the digital cable replacement, offering live sports, local programming, and skippable ad formats. Despite being relatively new, it's become the most popular way Americans watch TV, making it impossible to ignore for reach-focused campaigns.

Ad-supported streaming platforms like Hulu, Peacock, Tubi, and Pluto TV each serve distinct audience segments with varying targeting capabilities and inventory quality.

Smart TV Apps including the Roku Channel, Amazon Freevee, and Samsung TV Plus provide direct access to cord-cutting audiences.

Programmatic Aggregators and DSPs bundle inventory across multiple sources, offering scale but often at the cost of transparency and control.

Some of the Main Challenges to Navigate

1. Fragmentation Chaos. Most marketing teams are simultaneously managing multiple DSPs, inconsistent measurement capabilities across platforms, incompatible data sets, and different creative specifications for each channel.
2. Measurement Confusion. Unlike digital channels with clear conversion tracking, CTV attribution often relies on probabilistic matching, view-through windows, and lift studies that make proving direct ROI challenging.
3. The Brand Awareness Trap. The biggest mistake we see is treating CTV purely as a top-funnel awareness play. This channel has proven direct-response capabilities that many marketers are leaving on the table.

Then there's the big one...the hidden costs...the "CTV tax." Here's what many marketers don't realize until they're deep into CTV execution: your media budget gets eaten alive by fees and inefficiencies. The "CTV tax" is real. Consider this breakdown of where your budget actually goes:

• DSP fees: 10-20% of media spend
• Data and targeting costs: 5-15% depending on sophistication
• Attribution and measurement tools: 2-8% of total spend
• Agency/trading desk margins: 10-30%

Before you know it, only 40-60% of your allocated "media budget" is actually buying media. Compare this to traditional TV or even social platforms where 80-90% of budget typically goes to working media, and you can see why CTV efficiency becomes critical.

The fragmentation makes this worse. Running campaigns across 3-4 different platforms means paying platform fees multiple times, managing separate attribution stacks, and losing negotiating power that comes with consolidated spend.

Myth-Busting: CTV's Direct Response Power

The biggest misconception about CTV is that it can't drive direct response. We’ve seen CTV campaigns alone drive a 23% conversion lift for a home entertainment system brand. 

The key difference is creative strategy and measurement setup. CTV creative needs to balance brand storytelling with clear calls-to-action, and your attribution window needs to account for the longer consideration cycles that TV viewing typically generates.

Another real-world example:

A high-end furniture brand added OTT and YouTube CTV to their Memorial Day campaign, targeting high-income households and in-market furniture shoppers across premium streaming platforms. With geo-incrementality testing and pixel-based optimization, we saw:

60x ROAS, 106% lift in engagement, and 82% incremental revenue from CTV.

By treating CTV as a performance lever, they turned attention into measurable sales.

So now onto what we're really here for...cracking the CTV code: how do you turn streaming into a revenue machine?

Here's my recommendations for building a CTV strategy that will actually help you meet your goals.

Create A Strategic Framework for Success

1. Start with Clear Objectives: The platform you choose should align with your primary goal. Seeking broad reach? YouTube TV's massive scale might justify the premium. Targeting specific demographics? Niche streaming platforms could deliver better efficiency. Need direct response? Look for platforms with robust attribution capabilities.
2. Consolidate Where Possible: Rather than spreading budget across six platforms, focus on 2-3 that align with your audience and objectives. This improves your negotiating position and simplifies measurement while reducing the "CTV tax" we discussed in Part 1.
3. Treat CTV as Performance Media: The most successful CTV campaigns we've seen integrate streaming video into broader performance marketing strategies, using retargeting, lookalike audiences, and conversion optimization just like any other digital channel.
4. Invest in Unified Measurement: Whether through a CDP, attribution platform, or custom tracking setup, having consistent measurement across your CTV mix is non-negotiable for optimization.

Budget Allocation Guidelines

For most performance-focused brands, CTV should represent 15-25% of total video budget, not total media budget. This allows for proper testing while maintaining significant spend in proven channels.

Sample recommended allocation framework:

• 60% in the largest, most measurable platforms (likely YouTube TV or major streaming services)
• 30% in targeted niche platforms that align with your audience
• 10% in testing new opportunities

sStart here, and scale based on performance. The brands seeing the best results aren't necessarily spending the most, but they're the ones optimizing efficiently within the ecosystem's constraints.

Creative Considerations

The most effective CTV creative balances TV's storytelling capability with digital's direct-response elements. Here's what's working now:

• Longer-form content (30-60 seconds) that builds narrative but includes clear next steps
• QR codes and memorable URLs that bridge the TV-to-mobile gap
• Sequential messaging across multiple touchpoints rather than one-shot awareness plays

The non-skippable nature of many CTV placements allows for more complex messaging than typical digital video, but you still need to earn attention in the first 5 seconds.

Measure Wisely

Always Measure Beyond Vanity Metrics: Completion rates and brand lift studies are great, but they don't pay the bills. Focus on metrics that tie to business outcomes: cost per lead, return on ad spend, customer acquisition cost.

Attribution Windows: CTV typically requires longer attribution windows than other digital channels. Start with 7-day view-through, 1-day click-through windows and adjust based on your sales cycle.

Cross-Platform Tracking: Use consistent UTM parameters, dedicated landing pages, and promo codes to track CTV performance across your broader marketing mix.

Platform Selection Guide

• For Reach and Scale: YouTube TV, Hulu, major streaming platforms 
• For Targeting Precision: Programmatic DSPs with rich audience data 
• For Cost Efficiency: Smaller streaming apps and FAST channels 
• For Direct Response: Platforms with robust attribution and optimization capabilities

Don't try to be everywhere at once. Pick 2-3 platforms that align with your objectives and audience, then optimize ruthlessly.

Looking Forward: Preparing for What's Next

CTV will continue consolidating. Expect fewer, larger players with better measurement capabilities. Privacy changes will make first-party data integration even more critical. AI-powered creative optimization is already showing promising results for brands willing to test.

My recommended action items for the next 6 months:

1. Audit your current CTV spend. How much is actually reaching audiences vs. paying fees?
2. Consolidate platforms where possible to improve negotiating power
3. Test longer-form creative with direct response elements
4. Implement unified measurement across your CTV mix
5. Start building first-party data strategies for targeting

The Bottom Line

The brands winning in CTV today aren't necessarily spending the most; they're the ones who've figured out how to navigate the complexity while maintaining efficiency.

Start with clear objectives, realistic expectations about the ecosystem's complexity, and a measurement framework that proves value beyond vanity metrics. Master these fundamentals, then scale what works.

Ready to put these strategies into action? The CTV opportunity is real, but it requires a strategic approach that respects both the channel's unique characteristics and your business objectives. Start there, then scale what works. Get in touch with Jackie Pihonak to talk more about your streaming TV plan of action.