3 Trends Shaping the Future of CTV Advertising

It’s undoubtedly an exciting time in the streaming space – viewers have more options than ever for what to watch, while advertisers, in turn, have more opportunities to reach these audiences on the biggest screen at home.

In fact, ad spending on Connected TV (CTV) is expected to grow to $34.3 billion this year, driven largely by the reallocation of budgets away from linear television. This trend is thanks to a few key factors that are taking shape in the streaming space, in particular the growth of viewer engagement in FAST (ad-supported free streaming TV), new innovations in how marketers can target and connect with the audience, and the adoption of AI. Tools for strategic growth.

As we move further into 2025, understanding these key trends and opportunities in the streaming space will be central for advertisers to realize the true potential of the medium, and maximize its growth in the coming year.

Growing up FAST

This year, innovation in the ad-supported streaming space will help drive advertisers to FAST, where there is still great incremental growth and opportunity. With churn rates stabilizing and daily viewing hours increasing on average, FAST is proving to be a premium environment where advertisers have the ability to capture attention on the biggest screen in home and in a non-skippable environment.

In fact, over the past year, daily viewing hours have been steadily increasing, with a 5% increase from the third quarter of 2023 to the third quarter of 2024. Similarly, viewers I’m not just watching more hours of FAST; they are also engaged longer every time they turn on the TV. Session length increased by nearly 7% in the third quarter of 2024 compared to the same quarter last year, suggesting a shift to longer periods of streaming content consumption.

Innovations in targeting

As the ad-supported streaming market continues to grow and develop in 2025, so will the ways in which advertisers are able to target and reach new audiences on the medium.

In particular, streaming television advertising will continue to move beyond viewer demographics and broad gender-based targeting to more sophisticated strategies that consider mood and emotion. Genres don’t always tell the full story—a movie or TV show can be categorized as many different things depending on the scene. By targeting based on the emotion of the scene instead, advertisers can ensure a better contextual alignment that meets the viewer where they are and when they are emotionally primed to receive a message.

According to Wurl data, about 4% of viewers are lost per minute of an ad break, which is an 8% loss during a typical two-minute break. When there is an emotional resonance between an ad and the content on the screen, however, user churn can be reduced by up to 60%. As advertisers test and learn with these newer approaches to determine what drives results, we will see more creative campaigns developed with a wide range of emotions in mind, ultimately accelerating the effectiveness of CTV ads, creating more positive attention among viewers, and drive performance on FAST. .

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AI maturation

New advertising strategies such as emotion-based contextual targeting are driven by innovative technologies such as GenAI. However, to date, much of the conversation around such tools has been about how AI can be used to improve processes rather than driving larger strategic and creative initiatives.

In 2025, however, this will change: AI will mature as a technology not only useful for improving processes and creating efficiencies, but also for driving strategic initiatives and results for brands. In the streaming TV space, in particular, GenAI will build on recent advances to create truly dynamic and contextual advertising experiences by analyzing not only viewer demographics, but also moment-by-moment reactions. This will inspire a new level of hyper-personalization, allowing advertisers to deliver messages that adapt to the context of a scene and the emotional states of viewers.

2025 is shaping up to be a big year for streaming advertising. With the rise of FAST, new targeting strategies, and advances in AI, advertisers and publishers have the opportunity to reap the benefits and drive growth. Ultimately, better advertising strategies will mean greater results for brands and, in turn, stronger monetization potential for content owners – benefiting the entire ecosystem.

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