The Interactive Advertising Bureau (IAB) has released its latest report, painting a vivid picture of where television and video advertising dollars are heading in 2025. Digital video is expected to capture nearly 60% of all TV and video ad spending next year, with Connected TV (CTV) leading the charge after a strong rebound in 2024.
The “2025 Digital Video Ad Spend & Strategy Report: Part One,” developed with Advertiser Perceptions and Guideline, shows that CTV grew by 16% year-over-year in 2024. This bounce back was fueled largely by the rising popularity of sports and live streaming events, combined with broader use of self-serve and programmatic advertising tools that open the door for brands of all sizes.
David Cohen, CEO of IAB, summed it up plainly: “2024 was a pivotal year for digital video advertising. With high-quality content moving to streaming, advancements in advertising technology, and an influx of new inventory, growth has accelerated for both consumers and advertisers.”
Digital Video Leaves Linear TV in the Dust
According to IAB’s findings, digital video ad spending rose 18% to hit $64 billion in 2024. It is expected to climb another 14% in 2025, reaching $72 billion. This growth is now moving at two to three times the pace of total media spending overall.
All forms of digital video—CTV, social video, and online video—posted double-digit growth rates. Social video jumped by 21%, while online video rose 17%. This collective momentum pushed digital video past linear TV for the first time in history, firmly establishing it as the leading channel for advertisers aiming to meet audiences where they watch.
Chris Bruderle, Vice President of Industry Insights & Content Strategy at IAB, emphasized, “CTV and social video are now core pillars of a brand’s integrated media strategy. Advertisers are following consumers to these platforms, seeking not just reach but real business outcomes.”
Industry Categories Fuel New Ad Spend Increases
Certain industries are putting more skin in the game. In 2025, consumer packaged goods (CPG), retail, and pharmaceutical sectors are expected to post the biggest gains in digital video spending, growing their budgets by 13%, 18%, and 19% respectively. Brands are increasingly tapping into tools like AI-driven personalization, real-time analytics, and shoppable ads to drive immediate results and deeper engagement.
These changes are shifting the dynamic between companies and audiences. Advertisers are looking for faster, more direct paths to customer action, and digital video platforms are providing that opportunity with sharper targeting and measurement capabilities.
Digital Video is Set to Capture Nearly 60% of All TV/Video Ad Spend in 2025, CTV Rebounds to Double-Digit Growth in 2024, According to IAB
Small and Mid-Size Businesses Ride the CTV Wave
CTV advertising is no longer the domain of deep-pocketed brands alone. Thanks to self-serve programmatic tools, smaller companies are now making their presence felt. IAB reports that in 2025, much of the money flowing into CTV is coming from other sources like linear TV and social media budgets.
This shift speaks volumes about the growing faith in CTV’s ability to deliver targeted results without needing massive investments. Self-service tools have flattened the playing field, allowing businesses of all sizes to connect with audiences more directly and affordably.
David Cohen noted, “Self-service technology, accessible pricing, and the ability to link spending to real-world outcomes have empowered small and mid-size businesses to join the CTV movement in ways that were not possible a few years ago.”
What Comes Next for Digital Video Advertising
Part One of IAB’s report sets the stage for broader discussions that will continue throughout the year. Part Two, expected to be released during the IAB Media Center’s Video Leadership Summit on July 14, will dig deeper into strategies behind these spending trends.
As digital video cements its leadership role, advertisers face a fast-moving marketplace filled with opportunity but shaped by unpredictable economic headwinds. Shifts in consumer confidence, tariffs, and geopolitical uncertainty remain factors that could alter projections.
Nonetheless, the trajectory for digital video remains firmly upward, powered by stronger technology, better measurement, and content that keeps viewers engaged across devices.
Digital video has officially crossed the tipping point, leaving linear TV behind and heading for even greater dominance in 2025. CTV, social video, and online video platforms are not just rising—they are reshaping the media buying landscape entirely.
Brands that embrace flexible, data-driven strategies will find themselves better positioned to capitalize on these shifts. Those who hesitate may find it harder to catch up as consumer attention continues to migrate away from traditional television screens.
