TV advertising’s new era: competing on digital terms
As we kick off 2025, TV advertising has entered a new stage of competition, forcing traditional TV players – broadcasters and pay-TV operators – to adapt to the rules of digital advertising. The competitive landscape is more challenging than ever, shaped by three key conditions:
- CTV ad inventory oversupply has intensified competition for ad budgets, requiring broadcasters to expand beyond brand spend and attract performance and SMB (small and midsized business) advertisers.
- Shoppable and interactive ad formats represent the next frontier in TV advertising, necessitating deep UI integration and fueling competition among the gatekeepers of the living room screen.
- Retail media disruption is reshaping performance advertising, with closed-loop attribution becoming a critical differentiator for securing budgets.
At Caretta Research, we’re diving deep into these shifts as part of our expanded ad tech research for the year. This post is just the start – there’s much more to come in our upcoming reports and insights throughout 2025. For now, let’s explore what’s happening and what it means for the key players in this space.
From scarcity to oversupply: broadcasters must compete on new fronts
The CTV advertising market has passed the point of inventory scarcity, introducing an era where audience reach alone is no longer enough to guarantee success. Incumbent broadcasters and global streaming giants Netflix and Disney+ now face tougher competition for brand budgets and must evolve to attract performance and SMB advertisers.
In 2024, the landscape shifted dramatically as Prime Video’s ad-supported model flooded the market with ad inventory, alongside growing adoption of ad tiers from Disney+ and Netflix and the expansion of FAST (free ad-supported streaming TV) services. This means that in 2025, while scale and reach remain critical, broadcasters must differentiate their ad offerings to thrive in an increasingly competitive market.
Here’s what’s shaping the competition:
- Sports rights remain critical: Live sports are still one of the most powerful tools for attracting and retaining audiences. But the competition for these rights is intensifying, and broadcasters’ reliance on them makes their pitch increasingly precarious.
- Building ad tech capabilities: To compete for performance advertising budgets, broadcasters must expand their toolkits. Performance campaigns are by definition more data driven, since this market segment is all about driving immediate consumer action, unlike brand advertising that typically plays a longer game. In order to compete for performance and SMB market segments, broadcasters need to invest in programmatic infrastructure, self-serve ad platforms, and data-driven targeting capabilities tailored to SMBs and performance campaigns.
- Learning from YouTube: YouTube dominates as the most popular TV streaming service globally. While its “black box” approach raises concerns for some advertisers, its sheer scale still makes it an attractive channel for brand spend. But more importantly, YouTube is the point of entry into CTV advertising for many SMBs and sets expectations for seamless campaign setup, targeting, and reporting. Broadcasters need to match such capabilities to tap into this market segment.
Major U.S. broadcasters like Disney and Comcast have already launched platforms targeting SMB advertisers (Disney Campaign Manager and Comcast Universal Ads respectively), signaling a growing focus on this revenue stream. While European broadcasters may have a slightly longer runway, the writing is on the wall – they need to follow suit.
Control of the living room: a source of revenue and competition
The battle for the living room screen has escalated, with CTV OS platforms emerging as both enablers and competitors. These platforms – ranging from consumer electronics giants like LG and Samsung to tech players like Amazon and Google to independent players like Whale OS and Titan OS – are redefining TV advertising by monetizing the home screen and user interface (UI) before the consumer has even started to engage with video content.
Here are the key dynamics:
- CTV OS platforms are data goldmines: With investments in advanced ad tech stacks and particular ACR (automatic content recognition), platforms like LG Ads (successful integration of Alphonso TV acquisition in 2021) and Vizio Inscape are leveraging their holistic view of user engagement with their TV to deliver targeted advertising.
- Home screen as a touchpoint: In 2024, several major CTV OS platforms introduced high-impact ad formats designed to capture consumer attention the moment they turn on their TV. Examples include Roku Home Screen video ads, Amazon Fire TV screensaver ads, and Google TV Masthead. As CTV OS platforms continue to open up UI advertising beyond the typical ‘endemic’ ads for streaming services and content, the revenue potential for these touchpoints will only grow.
- Shoppable ad formats: Shoppable ads are emerging as the next frontier for CTV advertising, and CTV OS platforms are uniquely positioned to lead this evolution. Deep integration with the user interface will be critical to advancing shoppable ad formats beyond basic QR codes, creating a seamless experience that transforms passive viewers into active shoppers.
Broadcasters and streamers now face dual challenges: navigating their dependence on CTV OS platforms for distribution while competing against them for ad dollars. The entry of The Trade Desk’s Ventura OS introduces a neutral alternative but also adds another layer to the competitive landscape.
With the stagnation of the display advertising market, CTV presents a critical growth opportunity for ad tech vendors. The Trade Desk is positioning itself as a new kind of market intermediary in the CTV space, rather than merely adopting its existing solutions for a new environment. Ventura OS strengthens the value proposition of The Trade Desk’s Unified ID 2.0, tying seamlessly into its broader strategy in retail media. Unlike CTV OS vendors with proprietary inventory, Ventura offers broadcasters and streamers a neutral platform for distribution, free from direct competition for ad dollars. However, it is equally important to appeal to OEMs (original equipment manufacturers), who increasingly have ambitions of their own in the advertising space. The Trade Desk is betting that neutrality, coupled with streamlined identity solutions, will make Ventura a compelling partner for broadcasters, streamers and OEMs alike.
Meanwhile, pay-TV operators are exploring ways to stay relevant. Comcast and its subsidiary Sky have made bold moves to transform into CTV OS operators through initiatives like Sky Glass, Comcast X Class, and Xumo (a joint venture between Comcast and Charter). These efforts underscore the need for pay-TV operators to add an advertising dimension to their strategy.
Building on their aggregation of streaming services, billing relationships, and precise consumer identifiers, pay-TV operators are well-positioned to become valuable players in the data-driven TV ecosystem. The next step is taking a leaf from the CTV operator playbook: experimenting with home screen, UI, and EPG (electronic program guide) ad formats. These ad offerings could open new revenue streams and pave the way for an integrated aggregation and advertising strategy that would ensure pay TV operators remain key gatekeepers of the living room TV screen.
Retail media: the rise of performance advertising in CTV
Retail media has emerged as one of the most transformative forces in advertising. Retail media networks are redefining the game by offering closed-loop attribution – a capability that directly connects ad impressions to consumer purchases. This kind of accountability is transforming how advertisers allocate budgets and evaluate ROI, and it’s creating new opportunities (and challenges) for CTV.
Why this matters:
- Closed-loop attribution: Retailers bring a unique dataset that bridges online activity and purchase behavior – enabling brands to track the full consumer journey all the way to the brick-and-mortar till.
- Broadcasters need data innovation: To collaborate effectively with retail media, broadcasters must invest in first-party data products, such as proprietary audience graphs and identifiers.
- Ad format evolution: Performance advertisers will increasingly demand innovative formats, including interactive and shoppable ads, that go beyond traditional 30- or 60-second spots.
Retail media networks, for their part, are eager to expand into the premium CTV market, moving beyond the low-value display ads that currently dominate their portfolios. Partnerships between media owners and retailers are essential for unlocking this opportunity.
Broadcasters like Disney and TF1 have already launched proprietary audience graphs that will enable them to effectively integrate retail media strategies into their ad offerings. This ability to offer seamless collaboration with retail media networks – backed by robust data capabilities – will define success in 2025 and beyond.
What’s next – and how to win CTV in 2025
2025 is shaping up to be a transformative year for TV advertising, as the convergence of CTV and retail media reshapes the competitive landscape. So, how can companies position themselves for success? Here are key recommendations for the main stakeholder groups:
- Broadcasters and streamers: invest in a cohesive data strategy and a robust ad tech stack to remain competitive. The ability to integrate performance-driven capabilities will be critical for capturing new advertising budgets.
- Pay TV operators: Your primary competition is no longer other pay-TV providers but smart TV companies, whose business models revolve around advertising. Learn to compete on their turf—leveraging your existing strengths, such as billing relationships, precise consumer identifiers, and a strong aggregation strategy.
- Ad Tech vendors: The intersection of CTV and retail media represents your next growth opportunity. Most broadcasters and retailers lack the in-house tools, staff and expertise to power this market segment, creating a golden opportunity for innovation. Focus on developing solutions for shoppable and interactive ad formats to address the future of TV advertising.
2025 will belong to those who embrace these opportunities, and we’re here to help. At Caretta Research, we provide the tools and insights you need to make informed technology decisions. Our Portal gives you access to in-depth research and analysis, while our Consulting Services are tailored to help you solve specific challenges and capitalize on emerging opportunities in CTV and retail media.
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