As connected TV (CTV) cements its role as a dominant channel in the digital advertising ecosystem, a new Gracenote report reveals a critical gap between strategic goals and execution. Despite allocating a growing share of media budgets to CTV, marketers continue to prioritize audience-based targeting tactics that undermine their stated objectives of brand awareness and customer acquisition.
The Gracenote 2025 CTV advertising report, based on a survey of 600 U.S. brand and agency executives across industries such as retail, finance, telecom, and healthcare, found that 30% of respondents listed brand awareness as their top objective for CTV campaigns, followed by revenue growth (28%) and customer acquisition (22%). Yet, 80% of these marketers continue to rely on performance-oriented targeting strategies such as demographic, behavioral, and interest-based filters—tactics better suited for lower-funnel goals like retention and conversion.
This mismatch is having real consequences. A striking 32% of media professionals surveyed said they do not consider CTV to be a “very effective” media channel. While 27.8% rate their CTV ad spend as “extremely effective,” 40.5% place it in the merely “moderately effective” category, underscoring a lack of confidence in outcomes. The top concern cited was the inability to confirm whether ads are reaching the intended audience.
“CTV has not delivered the scale and premium reach that marketers expect of the largest screen in the house largely based on the use of narrow targeting tactics,” said Jake Richardson, VP of Partnerships at Gracenote. “By taking better advantage of contextual targeting capabilities with their CTV campaigns, they have new opportunities to drive both return on ad spend and the scale they’ve been looking for.”
CTV spend in the U.S. is forecasted by the IAB to reach $26.6 billion in 2025, up 12% from 2024. Nearly one-third of respondents to the Gracenote survey said they allocate 40% or more of their total media budgets to CTV, with 52% of brands in the financial services, retail, tech, and healthcare sectors reporting they’ve shifted at least 26% of their budgets to the channel over the past three years.
This explosive growth, however, has not translated into improved effectiveness. The report highlights that ad-supported streaming content—such as that found on free ad-supported TV (FAST) channels—now accounts for more than 45% of streaming viewership. And yet, the quality of metadata and content transparency on these platforms remains poor. For example, a Gracenote sample of 28 sports programs on FAST channels showed that 55% lacked original air date information, and only five included accurate team matchups, a glaring deficiency in an era where 85% of CTV buys are programmatic.
Gracenote argues that standardized, content-level metadata can remedy these inefficiencies by enabling contextual targeting. Yet only 45% of advertisers in the survey claimed to be “very familiar” with contextual targeting strategies. Still, 62% said that the availability of standardized metadata would increase their confidence in CTV ad planning, and 54% said it would justify increased ad spend.
The report also underscores the strategic advantage of program-level data. Knowing not just who is watching, but what they are watching—such as a gritty crime drama or a family-friendly show—can enable better brand alignment and drive top-of-funnel objectives more effectively. This is especially important as marketers increasingly look to CTV for brand building rather than just performance.
As streaming overtakes traditional TV in time spent—accounting for 48% of U.S. TV consumption in Q1 2025 compared to 46% for live TV—the imperative for marketers is clear: adapt strategies to the new reality of viewing behaviors. The failure to evolve beyond traditional user-based targeting is limiting the full potential of the largest screen in the home.
For Gracenote, a business unit of Nielsen, the solution lies in its robust content metadata, taxonomy, and ID infrastructure. These tools are designed to support programmatic platforms in enabling smarter buying decisions and ensuring brand suitability, particularly in the highly fragmented CTV environment.
With brands investing more heavily than ever in CTV, the question is not whether the platform has potential—but whether marketers are ready to leverage it effectively. As Gracenote concludes, “The scale marketers have been looking for may have been there all along. They just weren’t looking at the content.”
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