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.

If you’re evaluating streaming ads, one of the first questions you’re likely asking is cost. In this guide, we’ll break down OTT advertising cost, CTV CPMs, and CTV advertising rates, and answer common questions like how much does it cost to advertise on CTV.

We’ll also walk through how to buy OTT advertising in a way that makes sense for SMB budgets, without long-term commitments or opaque pricing.

The Cost of CTV Advertising: CPMs, Rates, and What You’re Paying For

Most entry-level CTV campaign costs start between $25–$65 CPM, according to industry benchmarks. These rates reflect premium, full-screen placements delivered during long-form streaming content.

With Paramount Ads Manager, CTV campaigns start at $7 CPM, offering 80%+ savings compared to industry average CPMs. This lower barrier to entry makes CTV advertising accessible for businesses that want TV-quality placements without traditional TV buying costs.

Learn how CTV advertising pricing works across different inventory tiers with Paramount Ads Manager. >

Rather than fixed airtime purchases, CTV pricing is CPM-based, giving advertisers predictable costs and flexibility. This model aligns closely with how small to medium-sized businesses already buy and manage other digital channels, making CTV easier to plan, test, and scale.

How CTV Advertising Rates Compare to Traditional TV

When businesses explore CTV, they often compare it to traditional television and ask:

How much do TV commercials cost?
What is the price of a local TV commercial?
How much to advertise on TV?

Traditional TV pricing is typically based on fixed placements, time slots, and market size, with limited flexibility once a buy is locked in. CTV advertising rates, by contrast, adjust dynamically based on targeting, content, and demand, giving advertisers more control over spend and reach.

This makes CTV a more approachable option for SMBs that want television-scale impact without committing to rigid buying models.

What Drives OTT Advertising Cost?

Several factors influence OTT advertising cost and CPMs:

**Audience targeting: **Narrowing by ZIP code, age, or household attributes can increase CPMs, but also improves relevance.
**Content environment: **High-demand programming like sports, news, or new releases may carry premium pricing.
**Ad length: **30-second ads typically cost more than shorter formats, but offer more time to tell your story on a full-screen canvas.

The key is balance. Broader targeting can help keep CPMs efficient early on, while refinements over time help improve performance.

Not All Impressions Are Created Equal

When comparing OTT advertising cost across channels, it’s important to look beyond CPM alone.

CTV impressions are full-screen, unskippable, and delivered during premium streaming content. That level of attention often leads to stronger recall and more meaningful engagement than formats designed to be scrolled past.

For many advertisers, this translates into improved downstream performance, including stronger cost per lead when CTV supports search and social campaigns.

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.

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.

How to Buy OTT Advertising Without Wasting Budget

Cost questions often lead directly to buying questions. How to buy OTT advertising today is far simpler than traditional TV buying.

Self-serve CTV platforms allow advertisers to:

Set and control budgets
Adjust targeting in real time
Test creative without agency fees
Measure performance transparently

This flexibility makes CTV accessible for businesses that want to move quickly, learn from early results, and optimize over time.

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.

CTV Advertising Best Practices to Optimize CPMs

To get the most value from your spend:

Start with broader targeting to collect performance data
Use creative that’s designed for the big screen, not repurposed social ads
Refine audiences and messaging based on real results

Even small creative or targeting adjustments can improve engagement and lower effective CPMs.

Now 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.”	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. No agency retainer. No opaque fees. 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.

Our Take on OTT and CTV Advertising Cost

CTV advertising is no longer a premium-only channel reserved for large brands. With modern pricing models and self-serve platforms, CTV advertising rates are competitive, predictable, and well within reach for SMBs.

With Paramount Ads Manager, advertisers can launch, optimize, and scale CTV campaigns starting at $7 CPM, without agencies, long-term contracts, or surprise fees. It’s a practical way to bring TV into your media mix while keeping budgets flexible and performance measurable.