It’s undoubtedly an exciting time in the streaming space – viewers have more options than ever for what to watch, while advertisers, in turn, have greater opportunities to reach these audiences on the biggest screen in the home.

In fact, ad spend on Connected TV (CTV) is expected to grow to $34.3 billion this year, driven in large part by the reallocation of budgets away from linear television. This trend is thanks to a few key factors taking shape in the streaming space, notably the growth of viewer engagement on FAST (free ad-supported streaming TV), new innovations in how marketers can target and connect with audiences, and the adoption of AI tools for strategic growth.

As we move further into 2025, understanding these key trends and opportunities within the streaming space will be central for advertisers to realize the medium’s true potential, and maximize their growth in the year ahead.

Growing FAST

This year, innovation in the ad-supported streaming space will help drive advertisers to FAST, where plenty of incremental growth and opportunity still lies ahead. With churn rates stabilizing and daily hours of viewing increasing on the medium, FAST is proving itself as a premium environment where advertisers have the ability to capture attention on the largest screen in the home and in a non-skippable environment.

In fact, over the past year, daily hours of viewing have been steadily on the rise, with a 5% increase from the third quarter of 2023 to the third quarter of 2024. Similarly, viewers aren’t just watching more hours of FAST; they’re also engaging for longer each time they turn on the TV. Session lengths were up nearly 7% in the third quarter of 2024 compared to the same quarter last year, suggesting a shift to longer content consumption periods on streaming.

Innovations in targeting

As the ad-supported streaming market continues to grow and develop in 2025, so, too, will the ways in which advertisers are able to target and reach new audiences on the medium.

Specifically, streaming TV advertising will continue to move beyond viewer demographics and broad genre-based targeting to instead more sophisticated strategies that consider mood and emotion. Genres don’t always tell the full story – one movie or TV show can be categorized as multiple different things depending on the scene. By targeting based on the emotion of the scene instead, advertisers can ensure better contextual alignment that meets the viewer where they are and when they’re emotionally primed to receive a message.

According to Wurl’s data, roughly 4% of viewers are lost per minute of an ad break, meaning an 8% loss during a typical two-minute break. When there’s emotional resonance between an ad and the content onscreen, however, user loss can be reduced by as much as 60%. As advertisers test and learn with these newer approaches to determine what drives outcomes, we’ll see more creative campaigns developed with a broad range of emotions in mind, ultimately accelerating CTV ad effectiveness, creating more positive attention among viewers, and driving performance on FAST.

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AI maturation

New advertising strategies like emotions-based contextual targeting are driven by innovative technologies like GenAI. Still, to date, much of the conversation around such tools has been about how AI can be used to improve processes as opposed to drive bigger strategic and creative initiatives.

In 2025, however, this will shift: AI will mature as a technology not just useful in improving processes and creating efficiencies, but also in driving strategic initiatives and outcomes for brands. In the streaming TV space, specifically, GenAI will build on recent advancements to create truly dynamic and contextual ad experiences, analyzing not only viewer demographics but moment-by-moment reactions. This will inspire a new level of hyper-personalization, allowing advertisers to deliver messages that adapt to the context of a scene and viewers’ emotional states.

2025 is poised to be a big year for streaming advertising. With the rise of FAST, new targeting strategies, and advancements in AI, advertisers and publishers alike have the opportunity to reap the benefits and drive growth. Ultimately, better advertising strategies will mean greater outcomes for brands and, in turn, stronger monetization potential for content owners – benefitting the entire ecosystem.

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