Gracenote Report Shows Why CTV Ads Miss the Mark: Narrow Targeting Stalls Effectiveness
A new report from Gracenote highlights a major gap in connected TV (CTV) advertising strategies. Marketers say their top goal is brand awareness, but most are still using performance-style targeting tactics better suited for direct response campaigns. The result: wasted reach, lost scale, and missed opportunity in one of the fastest-growing ad channels.
Brand Goals vs. Actual Practice
The Gracenote survey of U.S. media professionals revealed that 80% continue to focus on user- and audience-based targeting. These methods zero in on small segments instead of delivering broad reach. Yet when asked about campaign objectives, respondents placed brand awareness at the top, followed by revenue growth and customer acquisition. Customer retention, which typically depends on performance marketing, ranked last.
This mismatch may explain why 32% of respondents say they don’t view CTV as a very effective media channel. The tactics simply don’t line up with the objectives.
CTV Spending Is Surging
Despite the concerns, CTV is commanding bigger slices of ad budgets. The IAB projects U.S. ad spending on CTV to hit $26.6 billion this year, a 12% jump from 2024. Nearly one-third of marketers surveyed by Gracenote reported dedicating 40% or more of their budgets to CTV campaigns. The dollars are flowing into the channel, but the strategies aren’t keeping pace with the stated goals.
The Case for Content-Based Targeting
Gracenote argues that marketers should expand their approach by incorporating content-based targeting. Instead of focusing solely on who the viewer is, campaigns should also consider what the viewer is watching. Program-level data organized in a structured taxonomy makes this possible. With that, advertisers can align messages with premium content, broaden their reach, and strengthen brand alignment.
“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, they have new opportunities to drive both return on ad spend and the scale they’ve been looking for.”
What CTV Can Learn From Display Advertising
The CTV market is echoing the growing pains of display advertising in the early 2000s. Back then, advertisers relied heavily on direct audience targeting with cookies and demographic data. While precise, those methods often limited reach and led to rising costs. The real breakthrough came when contextual targeting matured—matching ads to relevant content on a page instead of just user profiles. That shift delivered scale, brand safety, and better alignment with consumer attention. CTV now stands at a similar crossroads. By looking at what content viewers consume, rather than narrowing in too tightly on who they are, advertisers can unlock the scale needed to make their budgets work harder.
Gracenote’s Position in the Market
Gracenote has long been known for powering entertainment search and discovery features that connect viewers with shows and movies. Now, the company is leaning into advertising by using its metadata, taxonomy, and IDs to improve programmatic CTV campaigns. With data covering media and entertainment, telecom, retail, financial services, automotive, consumer packaged goods, and health care, its goal is to help advertisers align their buys with the right programming context.
Survey Scope
The findings come from a survey of U.S.-based brand and agency executives responsible for media planning and buying. Participants spanned multiple industries, from entertainment to financial services. Across categories, the theme was consistent: budgets are flowing into CTV, but measurement of effectiveness lags, largely because of how campaigns are being structured.
CTV is no longer a niche channel—it’s mainstream. But the tactics being used don’t always match the ambition of the budgets flowing in. Gracenote’s report makes the case that a shift from narrow audience-based targeting to broader content-driven strategies could unlock the brand awareness scale advertisers are chasing. Display advertising found its stride by balancing audience and context, and now CTV is being asked to do the same. For a channel that commands the “biggest screen in the house,” failing to adapt may leave marketers paying for reach they never actually achieve.