The 2025 CTV opportunity: Where retail media and premium inventory converge

As we approach 2025, the growing connected TV (CTV) market holds great promise for marketers eyeing new, data-driven opportunities in streaming video. The power of CTV lies in its ability to not only engage viewers more dynamically than traditional linear TV, but also reshape the advertising strategy — especially as it intersects with retail and commerce media. With major brands and newcomers alike poised to double down on CTV investment in 2025, the stage is set for transformative shifts in ad spend, premium inventory, and the value proposition that CTV offers.

From linear TV to CTV: A shift long in the making

The widespread migration of viewers to streaming media has been well documented. Despite this shift, ad spend has been slower to follow. Why? Linear TV’s longstanding annual contracts and low CPMs have kept many brands locked in, a dynamic that has kept the balance tipping in favor of traditional channels. However, with major linear TV upfronts coming soon, 2025 is likely to tell a different story. Brands that previously “tested” CTV in smaller measures are now witnessing competitors pivoting budget to streaming. This momentum suggests a powerful trend of brands ramping up their CTV budgets.

Vendors of all sizes are touting CTV offerings, which can lead to brand confusion and the need for more education on what CTV truly entails. Investment firms and major holding companies have placed their bets on CTV to drive revenue, seeing it as a channel poised to reshape the entire media buying industry.

Creative development and consolidation

Despite the hype around CTV, high-quality creative remains an issue. Brands need TV-quality assets that engage viewers — something that can be a costly investment. While AI-powered creative companies have emerged in response to this demand, quality often remains subpar. For CTV to deliver on its promise, marketers need to prioritize strong, effective creative work that matches the channel’s potential. As the creative services supporting CTV grow and evolve, they’ll play a critical role in accelerating adoption and improving ad quality.

Big Tech’s grip on the streaming world likewise remains strong, with companies vying for dominance through content consolidation and streamlined pricing models. Just as Warner integrated HBO Max into a single interface with “Max,” we may soon see similar moves from other industry giants. Disney could unify Disney+, Hulu and ESPN into a single platform — or even sell off ESPN, consolidating Hulu and Disney content under one roof.

The low barrier to entry for streaming means that we can likely expect an influx of new platforms, often catering to niche audiences through specialized content. Free ad-supported streaming TV (FAST) is also on the rise, offering consumers more options and reshaping traditional release schedules. FAST mirrors the legacy format of movie-release timelines, but in reverse; instead of moving from theater to TV, content moves from streaming to ad-supported models, making premium content more accessible. Although some international markets still prefer traditional theater releases, the U.S. continues to embrace streaming-first releases, positioning the nation as a leader in the streaming transformation.

Defining premium inventory

When it comes to “premium” CTV inventory, it’s essential to look beyond traditional definitions and embrace a tiered approach. There’s a tier 1 category — Netflix, Hulu, Disney, Peacock and live sports — where audiences are most engaged with top-quality, professionally produced content. Tier 2 channels like HGTV, News, Tubi and Pluto still offer valuable inventory, albeit with different content and ad placement contexts. Tier 3 encompasses channels with niche or highly specific audiences, including local news and unique sports.

To determine what constitutes premium CTV inventory, advertisers need to factor in both the content quality and audience engagement levels. If we focus only on content quality, we may miss the opportunity to reach engaged viewers with high intent — the ones most likely to convert. True premium inventory, then, isn’t solely about where an ad appears but content quality, who is watching and how likely they are to become a customer. Conversely, non-premium inventory includes platforms like YouTube and user-generated content that, while popular, sometimes lack the professional curation that makes CTV impactful.

How CTV has redefined the value proposition for advertisers

CTV has democratized TV advertising, opening doors for brands of all descriptions. In the past, TV ad breaks were dominated by big spenders in CPG, automotive and insurance. Now, direct-to-consumer brands, small-to-medium enterprises and hyper-targeted campaigns share the same screen space. Unlike traditional TV, which matches ads to shows, CTV empowers advertisers to deliver ads based on individual viewer profiles, enhancing the connection and driving higher engagement.

Furthermore, CTV’s advanced metrics allow advertisers to measure return on ad spend, customer acquisition cost, cost per action and other metrics directly tied to business outcomes. The ability to track these KPIs enables brands to make data-driven decisions, helping them ensure their marketing dollars are well spent and directly impactful. CTV’s shift from reach-based metrics (like gross rating points) to actionable insights has reshaped its role from a supporting channel to a critical driver in marketing strategies, positioning it as a game changer for advertisers looking to grow and scale.

The opportunity in CTV in 2025 is vast, with premium inventory options expanding and retail media integrations adding new layers of engagement. As brands, vendors and platforms converge in this space, the competitive landscape will continue to evolve, presenting both challenges and exciting opportunities. For brands ready to invest in quality creatives, target high-intent audiences and leverage data-driven insights, CTV will prove to be an essential channel for achieving growth and meaningful engagement in a highly saturated market.

This op-ed represents the views and opinions of the author and not of The Current, a division of The Trade Desk, or The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk.