TV is evolving into a critical channel for brand marketers, according to a report released Monday by market research and technology company Circana.
The report, “The Future of TV: Where Immersion Meets Commerce,” found that 75% of U.S. households subscribe to ad-supported streaming services, driving TV to an unprecedented transaction-ready scale.
TV has moved from one-way engagement to two-way interaction, it explained, opening new opportunities for advertisers to engage audiences more effectively.
Advertisers looking to maximize the impact of their marketing dollars can do so by embracing interactive TV, according to Circana, which reported that connected TV now drives a higher return on ad spend (ROAS) than linear TV by more than 15% and short-form video by more than 21%.
Those performance gains show TV moving from a reach vehicle to a full-funnel, results-driven platform, the report reasoned.
“Those findings make sense based on what I see every day with pet brands,” confirmed Patricia Jones, CEO and co-founder of New York City-based Paws PR, which produces TV segments for product placement of pet brands.
“Anyone tuning into connected TV has an intention to view content they are interested in,” she told the E-Commerce Times. “On connected TV, brand content is genuinely relevant to a customer.”
Rethinking the Funnel
“Streaming video and connected TV in particular absolutely tend to outperform linear TV,” said Michael Goodman, a senior contributing analyst with Parks Associates, a Dallas-based market research and consulting company specializing in consumer technology products.
He explained that ad-supported streaming has changed how brands think about the funnel — the journey a consumer takes from first becoming aware of a product to eventually buying it.
“Ad-supported streaming turns video into a data-driven, interactive and measurable channel with more precise discovery, more dynamic storytelling and purchases that become immediate and tractable,” he told the E-Commerce Times. “That fundamentally reshapes how brands plan and execute campaigns.”
Katherine Cartwright, co-founder of Criterion Global, an international media buying agency headquartered in New York City, agreed. “Two-way interaction is the payoff of quality measurement,” she told the E-Commerce Times.
“TV can become a feedback loop,” she said. “Viewers don’t just watch — they respond, search, scan, and transact. Every airing can now be measured for its potential downstream signal, which fundamentally changes how we plan and optimize campaigns.”
Contrary to Circana’s findings, however, she argued linear and short-form TV can outperform CTV. “We’ve proven it many times,” she asserted. “The reality is that the technology has evolved faster than the means to universally measure it, and most advertisers don’t know how to measure video strategy holistically.”
Surrounding Interaction
Streaming and TV have now been working hand in hand for quite some time and are an accepted, expected part of the consumer experience, observed Aaron Smedley, GM of Shopify at Cloudinary, a global image and video platform. “This means that video has evolved away from just being a one-way storytelling channel and now has to function like a storefront,” he told the E-Commerce Times.
“Thanks to streaming, video is always-on and accessible, which has completely changed the discovery game for advertisers because now it occurs through delivered content and not just search,” he explained. “Video is directly driving action, which means content deliverers have got to meet consumer expectations of high quality with fast loading times and a completely seamless experience.”
“Even though video is now more effective than ever, consumers’ patience is still very thin,” he continued. “If something is slow to load, the quality is poor, or the content is not personally relevant, the consumer will move on very quickly, and that engagement is nearly impossible to recover.”
“Ultimately, TV has stopped being a one-way delivery experience,” he added. “Viewers can move from watching to taking action in an instant. This turns video into a more interactive, two-way experience for both the advertiser and the consumer.”
Connected TV is interactive but not always in the obvious “click the remote to buy something” way, maintained Mike Pierce, streaming insights and data partnerships lead at JustWatch, an online streaming guide with information on more than 200,000 movies and TV shows.
“The interaction is often happening around the TV rather than directly on the TV,” he told the E-Commerce Times. “Viewers are watching on the big screen while browsing, searching, texting, shopping, or using social platforms on another device.”
“So TV is becoming more interactive, but not necessarily because the TV interface itself is suddenly highly interactive,” he explained. “It is interactive because it is part of a larger multi-screen behavior loop.”
Market Redefined by Youth
The Circana report also noted that younger viewers and millennials are key audiences because of their size, spending power and viewing preference. It projected that by 2030, Gen Z and millennials will dominate the U.S. population and drive 60% of retail sales growth.
“Younger viewers have redefined the TV marketplace directly because of how they see TV itself,” said Cloudinary’s Smedley. “They don’t separate TV from digital content anymore.”
“To younger viewers, everything is universally content no matter what channel or format that it is delivered to them from,” he explained. “Every screen — laptop, tablet, mobile — is a content system.”
“Platforms like TikTok and YouTube aren’t really seen as social media anymore,” he continued. “Instead, they have become one more content vehicle because of the long, daily engagement those platforms see.”
“They want relevance, lower ad loads, and control,” added Criterion’s Cartwright. “That forces brands to earn attention, not just buy forced views.”
Results-Oriented Outcomes
While TV is becoming a commerce-enabled growth channel, most brands still treat TV production and e-commerce as separate departments, with separate planning and budgets.
“Connected TV has the potential to break down barriers and reduce the distance between these two so that each production works simultaneously as entertainment, persuasion, and point-of-purchase,” said Tavares Beverly, president of Beverly Boy Productions, a global video production company.
“While a shift like this demands coordination both on set and off, some of our best campaigns have come from bringing teams together to achieve a common goal from the start,” he told the E-Commerce Times. “Think production, marketing, and sales coming together from the start to ensure the highest possible return on ad spend. This kind of integration is what connected TV is capable of behind the scenes.”
“I think a big takeaway here is that, in many ways, brands and advertising are shifting to results-oriented outcomes,” observed Parks’ Goodman. “There’s an expectation that you can have a measurable return, and that return on your advertising dollar is more than just awareness.”
“Whether it is actionable ads, shoppable ads, retail media,” he continued, “all these things come together to produce actionable results for the advertiser that are deep in the funnel, close to the purchase or close to the outcome that they’re trying to achieve.”
“The important thing is not to define TV commerce too narrowly,” added JustWatch’s Pierce. It is not only about clicking ‘buy now’ with a remote. That may become more common, but the bigger opportunity is the connection between attention and intent.”
“The brands that do well in CTV will be the ones that do not treat it as just another digital ad placement,” he said. “It needs strong creative, a clear audience strategy, and a realistic view of how people actually behave, often watching on the TV, but acting on another device.”
