Few advertising channels are as evocative and prestigious as television. Since July 1, 1941, the TV ad has been the crown jewel of advertising campaigns—matching captivating storytelling with powerful sound and imagery. But while broadcast TV was long the height of advertising ambitions, its supremacy has rapidly ceded ground to connected TV (CTV). As of September 2024, linear TV accounted for less than half of US viewers’ total time spent watching TV, according to Nielsen data. This significant drop off has forced advertisers to follow their consumers to streaming TV.

This is having a big impact on CTV’s viability as an ad channel. EMARKETER forecasts that nine streaming services will each generate over $1 billion in ad revenues by 2026; in 2020 that was just two services. The result: CTV is undergoing both a rapid acceleration in audience pool size as well as advertiser investment. Advertising on streaming services is no longer niche or forward-thinking; it’s the new normal.

Ad prices drop, ad spending rises

In the past five years, practically every major streaming service introduced ad-supported subscriptions. With so many premium services flooding the market, ad inventory has never been more plentiful. A recent EMARKETER analyst report found that the increase in supply is not just ensuring advertisers are able to easily get seen—it’s also driving down ad costs. With so much additional CTV inventory now available, marketers are paying less money for streaming ad space than they used to.

Amazon Prime Video’s foray in advertising this year disrupted the market and further drove down costs. When Prime Video’s ad-supported tier launched in January 2024, Amazon priced its ads around $35 CPM—significantly lower than the competition at Max, Netflix, and Disney+. The goal was simple: rather than accumulate as much profit as possible in the short-term, Amazon priced its inventory to sell immediately.

By adding about 50 billion ad impressions to the US CTV market this year, Amazon has flooded the market with ad supply and forced other streaming services to drop their prices in a bid to stay competitive.

The race to keep CPMs low

Free ad-supported streaming TV (FAST) services, being dependent on ad revenues, still see the most ads—9 minutes per hour—which is still lower than linear TV’s 15 minutes. But because subscription services are less reliant on advertising, these pay services have significantly less ads served.

Netflix and Max still maintain the lightest ad loads, according to July 2024 MediaRadar research, while Paramount+ is on the higher end—approaching the number of ads served per hour on FAST channels. Unfortunately, a lower number of ads per hour can result in higher CPMs.

For its part, Prime Video—not featured in the chart above—includes just a few minutes of ads per hour, but plans to increase ad loads, while Warner Bros. Discovery hinted that Max’s ad loads will increase as well. Until then, Hulu has the highest ad load for premium pay services—but offers the lowest CPMs. By Q2 2025, Netflix and Max will be the only streaming services to have average CPMs higher than $30.

Advertising on CTV might be the new normal, but there’s nothing ordinary about the channel and its possibilities. 2025 looks to be another year of rapid growth and opportunity for streaming services and advertisers.

For more CTV insights, check out MNTN’s Performance TV Content Resources.