Industry Insights
OTT & CTV Advertising Cost: How to Optimize CPMs
Discover CTV advertising costs, as well as optimization strategies using Paramount Ads Manager.
These days, if you're a business looking to grow, you’ve almost certainly considered digital ads. But TV?
While many still view “the big screen” as an opportunity reserved for big brands (with even bigger budgets), connected TV (CTV) advertising is increasingly bridging that gap—emerging as a powerful, “best of both worlds” way to reach engaged viewers watching their favorite content.
Streaming technology has made it possible for more businesses than ever to take advantage of this powerful channel. Below, we’ll break down what goes into the cost of CTV advertising, how to get the most out of your budget, and what separates high-impact campaign wins from mere sunk costs.
Related: Connected TV Viewership: Trends Every Advertiser Should Know
The Cost of CTV Advertising Now
CTV advertising offers a powerful way to reach engaged audiences, but it’s important to understand what it costs—and why. While it’s common to see CPMs (cost per thousand impressions) starting at $15 (or more) with an average range of $20 to $40, those numbers reflect a very different kind of ad experience than those you’d find, say, in a social media channel or public display.
For example, CTV ads are typically full-screen, non-skippable ads that run alongside premium content, which provides a more focused, less interruptive experience for the viewer. That added attention often means a different price structure–a factor advertisers should consider before comparing costs across channels.
In the next few sections, we’ll break down what actually drives the cost of CTV campaigns, what influences CPMs the most, and how to get the best return on your budget.
Cost Factors of CTV Advertising
We understand that large-scale buys (such as programmatic) may see cheaper CPMs, but when you look at it holistically, it involves significant media spend, agency management fees, and potential creative support services. This adds up to fewer savings and less control for an SMB. Let’s take a look at CTV in comparison.
CTV ad costs vary based on a few key choices—especially in how specifically you target your audience, and where your ads will ultimately appear.
Most campaigns start with a base CPM around $15, but that number normally increases as you apply more refined targeting. Narrowing your audience by ZIP code, age, gender, or income can add $2 to $5 or more to your CPM.
In other words, the more tailored your targeting, the more you're likely to pay—but the result is hitting a more specific (and often more valuable) segment.
Content matters, too. Ads placed during high-demand programming like news, sports, or new releases tend to come at a premium. On the flip side, running your campaign across broader, free ad-supported content can help lower the cost.
Finally, even ad length plays a role. 30-second ads typically cost more than 15-second ones—but they also offer more time to land your message, especially on a full-screen format where viewers can’t skip ahead.
Not All Impressions Are Created Equal
When it comes to advertising, it’s easy to assume that one impression is just as good as another. But on CTV, what you’re actually paying for is attention—a big differentiator from other streaming platforms.
The format consistently drives higher engagement—for example, on the Paramount+ platform, advertisers often see a completion rate of about 96% (Paramount Internal, USA, 2024).
By contrast, impressions on social platforms tend to be scrollable, skippable—and, therefore, often muted. They usually appear mid-scroll or between posts, competing with dozens of other distractions. Even when the CPM looks lower, it’s harder to guarantee that someone actually watches—or even notices—the ad.
Related: Connected TV Ads vs. Social Media Ads
It’s the difference between showing your message before a movie starts vs. trying to get someone’s attention on a busy highway. Both are technically impressions, but only one gives your message the space to fully resonate.
The Strategic Value of CTV in Your Media Mix
The cost of CTV is only part of the equation. The real value comes from how it supports broader marketing goals—especially in the middle of the funnel, where building brand familiarity and trust matters most.
CTV works best when paired with other channels. While search and social are great for capturing intent, CTV adds reach and reinforces your message in a more immersive environment. That consistency across platforms helps companies stay top of mind with their potential customers, leading to long-term impact.
And because CTV ads are typically full-screen and unskippable, they tend to drive stronger recall than formats that are easy to scroll past or ignore.
In the end, CTV isn’t just about reaching the right people—it’s about making sure your message actually lands.
How to Optimize CPMs in CTV Advertising with Paramount Ads Manager
While CTV offers premium placements and high-impact impressions, some strategies are more efficient than others when it comes to managing your spend. Paramount Ads Manager, for instance, provides flexible tools that help control your CPMs without compromising on quality.
Below, we’ll take a closer look at some basic strategies to understand and unlock more value from every dollar you invest in CTV.
But First, Let’s Debunk CTV Pricing Myths
Let’s explore a few common misconceptions—and what actually drives performance.
| Myth | Reality |
|---|---|
| “CTV is too expensive for smaller businesses.” | With a minimum spend of just $500, Paramount Ads Manager makes it easy to get started—no massive budget required. It’s flexible, scalable, and built for businesses that want control over how they launch and grow their campaigns. |
| “You need a huge budget to get low CPMs.” | Large-scale media buys might come with discounted rates, but they often require long-term commitments and offer limited visibility into where your ads actually appear. With Paramount Ads Manager, you get self-service access, demographic targeting, real-time reporting, and full control over your budget. |
| “Only agencies can run TV campaigns.” | Paramount Ads Manager puts the power of CTV advertising directly into your hands.
Just a clear dashboard and the ability to launch a campaign on your timeline. |
| “I’m already on social media—why add CTV?” | It’s tempting to compare CPMs across platforms, but CTV impressions are different. Ads on connected TV are full-screen, unskippable, and delivered during premium content, making them far more likely to capture attention. As Matthew McClanahan, President of Moving Forward Marketing, said, “With Paramount Ads Manager, you're getting that full 30-second view for your video at an incredibly competitive CPM.” |
| “Paying a higher CPM will ensure that I see my ad run when I watch streaming content.” | Remember, streaming is not like linear TV—its viewership is diverse and constant, with no way to “predict” exactly where or when an ad may appear. Instead, CTV ads are placed in response to ongoing and always-changing watching patterns and audience behaviors. |
CTV Advertising Best Practices to Optimize CPMs
When it comes to keeping your CPMs efficient on CTV, a few smart setup choices can go a long way.
One of the easiest ways to start strong is by being where the most viewers are—for example, by using Paramount Ads Manager’s Peak Placement, which helps you test across a wide inventory range at the best available price. That’s particularly important when starting out: broader targeting empowers advertisers to cast a wide net, collect early performance data, and refine their audience over time.
Take care to unearth early insights and adjust your targeting and creative strategy accordingly—whether that means doubling down on high-performing regions, tweaking your messaging, or reallocating budget to placements that are driving results. With self-service tools like Paramount Ads Manager, you can make these adjustments easily, without the need to loop in a third party.
Finally, don’t underestimate the role of creative in CPM performance. Even small changes in tone, visuals, or messaging can improve engagement—and lower your effective cost per impression. If you’re short on resources, Paramount Ads Manager’s built-in AI tools can help produce creative variations quickly, without the usual production overhead.
Related: CTV Best Practices for Your Next Campaign: A 3-Step Guide
Our Two Cents
CPMs shouldn’t be compared in a vacuum. CTV advertising might look more expensive on paper, but CPMs alone don’t tell the full story. When you factor in attention, brand safety, and ad quality, it becomes clear that not all impressions are created equal—and that paying a little more can deliver much more in return.
With Paramount Ads Manager, you don’t need an agency or a massive budget to get started. The platform is self-service with a minimum budget of $500. You can control your spend, adjust your targeting, test creative, and monitor performance—all from one dashboard.
Whether you’re running a broad awareness campaign or fine-tuning your strategy to be more conversion-driven over time, CTV gives you the tools to make an impact where it matters most: on the biggest screen in the home.