Addressable TV vs. Connected TV: Where Should You Invest Advertising Dollars?

Marketers have long prized traditional linear TV advertising for its broad reach and high viewability. However, shifting viewer habits and technological advancements are changing that.

In 2020, linear TV accounted for 72.2% of the total daily viewing time in the US. In 2024, that number dropped to 56.5%, and EMARKETER predicts it will fall an additional 21.3% by 2026.

Meanwhile, time spent with connected TV (CTV) is increasing, driven by the rise of ad-supported streaming services and improved targeting capabilities.

Both addressable TV and CTV are supplanting traditional linear TV advertising, allowing advertisers to reach the right target audience and measure campaign performance with more precision. But which one is the right fit for your media plan?

In this article, we’ll explore the differences between addressable TV and CTV advertising, when to use both, and how to decide where to invest your advertising spend.

Addressable TV vs. Connected TV: Definitions and Distinctions

First, let’s clarify what addressable TV and CTV are, how they work, and their key differences. 

What Is Addressable TV?

Addressable TV advertising allows advertisers to target specific ads to individual households watching television through set-top boxes or satellite TV providers that support addressable advertising. 

Unlike traditional linear TV advertising, where viewers see the same ads while watching scheduled programming on broadcast or cable networks, addressable TV advertising uses data about household demographics, viewer behaviours, and geographic locations to segment audiences and deliver more relevant ads to viewers.

For example, travel and tourism marketers could serve different ads to different households watching the same scheduled program—showing a luxury resort ad to a high-income household or a budget-friendly package to a young family—based on the data that’s available.

How Addressable TV Advertising Works

First, service providers collect viewership data from their own subscribers or use audience insights from 3rd-party data providers to segment audiences based on specific characteristics. Ads get inserted into standard commercial breaks during TV programming based on the campaign’s goals and the ideal audience the advertiser wants to target. Campaign performance is then analyzed to improve targeting and optimize future ad placements.

What Is Connected TV?

CTV advertising is a type of digital advertising where ads appear within or alongside streaming content on connected TV devices. This includes in-stream video ads that play before, during, or after a TV show, movie, or other streamed content, as well as interactive or overlay ads that appear on-screen while the content is playing.

Unlike addressable TV advertising, which delivers ads to specific households watching scheduled programming, CTV advertising uses data-driven targeting to deliver ads to viewers streaming content—whether live or on-demand—through platforms like Disney, Max, Peacock, and Pluto TV.

How Connected TV Advertising Works

Unlike traditional linear TV advertising, which typically targets broad demographics, CTV advertising, similar to addressable TV advertising, allows advertisers to reach specific audiences based on their behaviour, location, and other demographic data. When a viewer watches content on a streaming service, it sends a bid request to a supply-side platform (SSP) that includes information about the viewer, such as their device type and general location. An ad exchange connects the SSP with demand-side platforms like StackAdapt, which either bid on inventory through programmatic auctions or help negotiate direct deals with publishers, which provide access to more exclusive inventory and greater control over where ads get placed.

Key Differences

Although addressable TV advertising and CTV advertising share many similarities, here are a few of the key differences:

	Addressable TV	CTV
Ad Delivery	Ads appear while viewers watch TV through cable set-top boxes or satellite TV.	Ads appear during internet-based streaming.
Devices	Cable and satellite-connected TVs.	Smart TVs, gaming consoles, and streaming sticks.
Targeting	Household-level targeting through cable/satellite provider data.	User, device, and IP-based targeting.
Content	Scheduled programming on broadcast or cable networks.	Streaming video, including live and on-demand content.
Ad Buying Process	Mostly done directly through cable or satellite TV providers.	Purchased programmatically or via direct deals with streaming platforms and publishers.

Advantages and Disadvantages

Addressable TV advertising and CTV advertising share many of the same benefits, especially compared to traditional linear TV advertising, including improved targeting, measurement, and attribution.

But what separates addressable TV advertising from CTV advertising is ultimately their scale and reach.

Between 2020 and 2024, the number of US households with a subscription to a traditional paid TV service or set-top box that allowed for addressable TV advertising shrank from 68.5 million to 48.9 million, a 28.61% decrease.

Meanwhile, the number of US households streaming content through CTV continues to rise. It will grow from 115.1 million in 2024 to 123.3 million by 2028, reaching 89.4% of US households.

Part of that has to do with the increased number of low-cost streaming services available, but also shifting consumer habits. 

For years, one of the main things that prevented people from cutting the cord with traditional cable and satellite TV providers was exclusive access to live programming—namely, live sports. However, with live sports shifting to streaming, more households are cutting ties with traditional pay-TV subscriptions.

As a result, CTV ad spending is surging. In 2026, $37.7 billion USD is projected to be spent on CTV advertising, compared to $1.85 billion USD for linear addressable TV. 

Although CTV is often perceived as having lower ad loads per hour, streaming loads can vary significantly, often ranging from one to nine minutes per hour, depending on the publisher. Similarly, although once dominated by ad-free subscriptions, ad-supported streaming continues growing in popularity, with 56% of viewers choosing a lower-priced ad tier in Q1 2024 alone.

Ultimately, deciding between addressable TV advertising and CTV advertising, or how much of your budget you want to allocate to each advertising channel, depends on who you want to reach. 

Stats on CTV often suggest that younger audiences (millennials and Gen Zers) are more likely to stream content through CTV than older audiences (Baby Boomers and Gen Xers), who are more likely to watch TV through a set-top box or satellite subscription. That said, a recent study found that both CTV and addressable TV play complementary roles in reaching adults aged 18-49, making addressable TV advertising a valuable strategy for gaining incremental reach.

Evaluating Impacts and Cost Considerations of Addressable TV vs. Connected TV

Now that we’ve gone over what addressable TV and CTV advertising are, how they work, and the benefits of each, let’s recap what to keep in mind when deciding where to put your advertising budget:

• Cost Efficiency: Although addressable TV can have lower CPMs than traditional linear TV, CTV is usually the most affordable, with CPMs ranging from $15 to $30 USD. This makes it easier for brands of all sizes to kickstart their CTV marketing strategy and secure premium inventory at a fair price.
• Targeting Capabilities: Both addressable TV and CTV provide more granular targeting options than traditional linear TV. While addressable TV enables household-level targeting, CTV offers even greater precision by targeting individual users who may be streaming separately within the same household.
• Ad Measurement and Attribution: Both addressable TV and CTV provide better measurement capabilities than traditional linear TV, allowing advertisers to track metrics and KPIs like impressions, view-through rates, conversion rates, and return on ad spend.
• Audience Reach: While addressable TV allows advertisers to target specific households, its reach is limited due to the shrinking number of cable and satellite subscribers. CTV, on the other hand, continues to expand as more households shift to streaming, with nearly 90% of US households expected to stream content through CTV by 2028.

The Future of Addressable TV and Connected TV

In a 2024 survey from Go Addressable and Advertiser Perceptions, when advertisers were asked why they used addressable TV advertising, they cited targeting, personalization, and incremental reach as the main reasons.

Those benefits also apply to CTV. Aside from scale, the major difference between addressable and CTV is that CTV inventory can be purchased programmatically.

But the industry is changing. Traditional TV providers are increasingly making their inventory available to programmatic partners, allowing advertisers to add high-quality addressable linear TV to their multi-channel campaigns to improve their reach and streamline their media buys.

To learn more about how to use CTV and addressable TV in your media strategy, download our guide to CTV advertising or speak with our team.