
When you turn on your Smart TV and start streaming your favorite show, an ad often appears before, during, or after the program. It looks simple: an ad plays, then the show resumes. But behind that brief moment is a complex system of technology and data working together in milliseconds.
To understand how Connected TV advertising works, it helps to follow the path of a single ad from the moment it's created to the moment it appears on your screen.
Step 1: The Advertiser Sets the Campaign
Every ad starts with a brand or agency defining its goals. They decide who they want to reach, what message to deliver, and how success will be measured.
In CTV, these campaigns are typically launched through a Demand-Side Platform (DSP), software that allows advertisers to buy ad space programmatically. The advertiser sets parameters such as:
Audience demographics and interests
Geographic targeting
Desired devices (like Smart TVs or streaming sticks)
Budget, bid price, and schedule
The DSP uses these inputs to automatically find available ad inventory that matches the advertiser's criteria across multiple publishers and platforms.
Step 2: The Publisher Makes Inventory Available
On the other side of the equation are publishers, the companies that own or distribute streaming content. These include major apps and networks such as Hulu, Peacock, Pluto TV, or The Roku Channel.
Publishers sell their ad inventory through Supply-Side Platforms (SSPs). The SSP connects to multiple DSPs and ad exchanges, making the publisher's available ad slots accessible to buyers.
When a viewer starts streaming a show, the publisher's system recognizes that there's an upcoming ad break. It sends out a bid request that includes details about the viewer's device, location, and available ad slot.
That request is what triggers the next step: the real-time auction.
Step 3: The Real-Time Auction Happens
As soon as the SSP sends out the bid request, multiple DSPs receive it simultaneously. Each DSP quickly evaluates whether its advertisers want to bid on that impression based on the targeting rules they've set.
This process, called real-time bidding (RTB), happens in a fraction of a second. Each DSP submits a bid, essentially the amount an advertiser is willing to pay to show their ad to that specific household.
The SSP compares all bids and selects the highest one that meets the publisher's quality and brand safety requirements. That winning advertiser earns the right to fill the next ad slot.
All of this happens faster than the blink of an eye.
Step 4: The Ad Gets Served
Once the winning bid is chosen, the ad file is delivered to the viewer's device through an Ad Server or via Server-Side Ad Insertion (SSAI) technology.
SSAI stitches the ad directly into the video stream so it plays seamlessly, without the buffering or black screens that used to accompany digital ad loading. The ad appears as part of the natural viewing experience, whether you're watching through a Smart TV, Roku stick, or game console.
Behind the scenes, tracking pixels and verification tags record what happened: whether the ad played fully, whether the viewer completed it, and what device or app it appeared on. This data flows back to both the advertiser and publisher for reporting.
Step 5: Measurement and Optimization
After the ad runs, performance data is collected and analyzed. Advertisers look at metrics like impressions, completion rates, and frequency to understand how effectively their ads are reaching audiences.
Many CTV campaigns also include attribution tracking, which connects TV ad exposure to outcomes such as website visits, app installs, or purchases. If viewers who saw the ad later visit the brand's website, that engagement can often be traced back to the CTV campaign.
This feedback loop allows advertisers to adjust targeting, bids, and creative in real time. CTV advertising isn't static like traditional broadcast. It's dynamic, data-driven, and measurable.
Why It Matters
Understanding how ads get to your Smart TV highlights why Connected TV has become one of the fastest-growing channels in advertising.
CTV combines the immersive power of television with the precision of digital. Every ad impression is auctioned, targeted, and measured with remarkable accuracy. Brands can reach the right households on the biggest screen in the home, while viewers experience relevant ads that feel natural within their streaming environment.
For viewers, this process happens invisibly. For advertisers, it represents a new era of control and accountability in television, one where every impression counts.
In Summary
Advertisers set up campaigns through DSPs.
Publishers offer available ad slots through SSPs.
A real-time auction determines which ad gets served.
The winning ad is stitched into the stream and delivered instantly.
Performance data flows back for optimization and reporting.
Every time an ad plays on your Smart TV, that full process unfolds in milliseconds, connecting brands, technology, and viewers in one seamless experience.