Corporate Media Spending Shifts and Undervalued Opportunities in CTV and FAST Channels
The corporate media landscape is undergoing a seismic shift as advertisers prioritize profitability and digital-first strategies. According to a report by KPMG, media companies are reevaluating their assets and customer profitability to streamline operations amid inflation and rising labor costs[1]. This recalibration has accelerated the migration of ad budgets from traditional channels like linear TV and print to digital platforms, particularly connected TV (CTV) and free ad-supported streaming TV (FAST) channels[1]. By 2025, CTV ad spend in the U.S. is projected to reach $26.6 billion, a 13% increase from 2024, while digital video ad spend is expected to account for 58% of total U.S. ad spending[4].
The Rise of CTV and FAST: A New Ecosystem
The CTV and FAST ecosystems are reshaping how brands engage audiences. Platforms like RokuROKU--, AmazonAMZN-- Fire TV, and AppleAAPL-- TV dominate device market share, with Roku holding 38% of the U.S. CTV market in Q1 2025[6]. The proliferation of FAST channels—now over 1,600 in the U.S.—has created a fertile ground for advertisers seeking cost-effective, high-engagement inventory[5]. These channels, such as The Roku Channel and Tubi, offer a linear TV-like experience with the flexibility of streaming, attracting both price-sensitive consumers and brands looking to test new formats[5].
For instance, Amazon's Brand+ initiative leverages AI to optimize CTV and online video ads by targeting users based on shopping and streaming behavior[4]. Similarly, Walmart's acquisition of Vizio has enabled the integration of retail media and CTV, creating closed-loop advertising environments that merge shopper data with ad exposure[5]. These innovations highlight the potential for undervalued providers to capitalize on the convergence of entertainment and commerce.
Undervalued Providers: Financial Metrics and Market Positioning
Several CTV and FAST providers are positioned to outperform in this evolving landscape. Roku (Roku Inc.) remains a dominant player, with its platform accounting for 68% of advertisers considering CTV essential to their media plans[4]. Despite its market leadership, Roku's stock trades at a P/E ratio of 18, significantly lower than its peers, reflecting undervaluation amid its rapid growth. Tubi, a FAST channel operated by FuboTVFUBO--, has seen a 20% increase in ad revenue year-over-year, driven by shoppable ad formats like Carousel ads and Tubi Storefronts[5]. Its ability to monetize user-generated content and low-cost inventory positions it as a compelling long-term investment.
Another overlooked opportunity lies in Pluto TV, a free ad-supported streaming service with 116 million U.S. viewers in 2025[5]. Pluto TV's ad load remains at 9 minutes per hour, indicating untapped monetization potential as advertisers seek to maximize reach without alienating viewers[3]. Its partnership with Samsung TV+ to promote Amazon's Prime Video series further underscores its strategic value in content distribution[5].
Challenges and Strategic Considerations
While the CTV and FAST markets offer substantial growth, challenges persist. Advertisers face fragmented measurement tools and data silos, with only 50% of CTV impressions offering full transparency[6]. Additionally, the rise of programmatic buying has increased competition for premium inventory, pressuring smaller providers to innovate. For example, Amazon Fire TV's 65% year-over-year market share growth in the U.S. highlights the importance of technological integration and ecosystem dominance[6].
Investors should prioritize companies with strong AI-driven personalization capabilities, as 65% of marketers view CTV as a performance channel[4]. Those leveraging shoppable ads, like Tubi and Amazon Prime, are also better positioned to capture the retail media boom, which accounts for 15% of CTV ad spend in the U.S.[5].
Conclusion: A Strategic Play for 2025
The shift in corporate media spending toward CTV and FAST channels presents a unique opportunity to invest in undervalued providers. Companies like Roku, Tubi, and Pluto TV are not only adapting to the digital-first paradigm but also pioneering new revenue streams through AI, shoppable ads, and retail media integration. As CTV ad spend grows at a 13% CAGR and FAST channels attract 47% of U.S. households weekly[5], the market is poised for consolidation and innovation. For investors, the key lies in identifying firms that can balance scalability, data-driven targeting, and cost efficiency—qualities that will define the next era of media consumption.
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