What’s keeping CTV CPMs high even as more inventory becomes available?
On the Ad Nauseam podcast last week, Shiv Gupta of U of Digital offered an interesting take. According to Gupta, midmarket advertisers “are not that savvy about CTV,” which makes it easier for “midtail and longtail adtech” players to capture bigger margins from their spend. The “oh my god, I saw my ad on Roku the other day—where do I write the check?” factor, he said, is a key reason these brands buy.
It’s a timely perspective: SMB and midmarket advertisers are spending freely—even for the most basic reason—which is helping keep CPMs high and margins strong for platforms. The “holy shit, we’re on TV” angle still carries weight.
Why This Matters:
Shiv’s point underscores a couple of things often overlooked in CTV.
First, there’s a psychological component at play. For smaller and midmarket brands, being on the big screen is about more than performance metrics—it feels like validation and legitimacy. That makes them less likely to cut spending quickly, even when budgets tighten. This gives some adtech platforms insulation.
Second, it explains why so many adtech companies are leaning into this segment overall. MNTN, soon AppLovin, Universal Ads, Magnite with its recent streamr.ai acquisition, and others are targeting midmarket advertisers with tools that simplify buying and emphasize performance. But performance and ease of access may just be the hook—once brands are in, the prestige of TV helps keep them there.
For context, CTV spending overall continues to rise and is expected to reach almost $34 billion by year’s end. A meaningful share of that growth is/should be coming from SMBs and midmarket advertisers shifting dollars from other channels (even social!).
Experts React:
Here’s the part of the Ad Nauseum podcast we’re focusing on, specifically:
Our Take:
If midmarket brands think advertising on CTV is “cool,” and that’s what keeps dollars flowing, then… so be it? That’s long been part of the appeal of advertising on linear TV, too, right? Granted, the audience scale is different (bigger?), but the psychology is similar.
The key, though, is ensuring the industry doesn’t exploit these less savvy buyers. Taking advantage might deliver short-term gains, but that can be ethically questionable and risks driving these advertisers away in the long run. Sustainable growth in CTV depends on building trust, not just cashing in on the “hey mom, we’re on TV” factor. It’s also built on performance to deliver ROI which, thankfully, the industry seems very focused on.
