Digital video projected to capture 60 percent of TV and video ad spend in 2025, IAB reports

Digital video is projected to account for nearly 60 percent of all TV and video ad spending in 2025, according to the Interactive Advertising Bureau’s “2025 Digital Video Ad Spend & Strategy Report: Part One.”

The report, released April 28, details trends across connected TV, social video and online video, showing that CTV ad spend rebounded with 16 percent year-over-year growth in 2024. This growth was driven by an increase in live streaming events, sports programming, and the expansion of programmatic advertising tools.

Developed in partnership with Advertiser Perceptions and Guideline, the report states that digital video ad spend rose 18 percent in 2024 to $64 billion and is forecast to grow another 14 percent in 2025, reaching $72 billion. This growth rate is two to three times faster than that of total media ad spending.

David Cohen, CEO of IAB, said in a statement that high-quality streaming content, improvements in advertising technology, and new inventory opportunities contributed to the expansion. He noted that connected TV is becoming a primary channel for both advertisers and consumers.

The report highlights that CTV, social video, and online video each posted double-digit growth in 2024:

• CTV ad spend increased from $20.3 billion in 2023 to $23.6 billion in 2024, a 16 percent rise, and is projected to reach $26.6 billion in 2025.
• Social video grew 21 percent to $23.7 billion in 2024 and is expected to climb to $27.2 billion in 2025.
• Online video grew 17 percent to $16.6 billion in 2024 and is forecast to hit $18.6 billion in 2025.

Chris Bruderle, vice president of industry insights and content strategy at IAB, said CTV and social video are now central to media strategies, offering targeting and performance measurement capabilities across devices.

The report also identifies consumer packaged goods, retail, and pharmaceutical sectors as leading drivers of digital video ad spend growth through 2025, with anticipated increases of 13 percent, 18 percent, and 19 percent, respectively. These sectors are increasingly utilizing AI-driven personalization, real-time insights, and shoppable ad formats.

Additionally, the study notes the growing role of small and mid-size businesses in the CTV space. This is attributed to the availability of programmatic self-serve tools, which allow smaller advertisers to more easily access and manage connected TV campaigns. In 2025, a significant portion of CTV ad dollars is expected to come from reallocations out of linear TV, social media, and other digital channels.

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Part two of the IAB’s report, focusing on strategies behind these trends, is scheduled for release on July 14 during the IAB Media Center’s Video Leadership Summit.