The Interactive Advertising Bureau (IAB) projects that digital video advertising will account for nearly 60% of total TV/video ad spend in the U.S. by 2025, doubling its share from just five years ago. This marks a significant shift from traditional linear TV to digital platforms, driven by the rise of Connected TV (CTV), social video, and online video.
Key Growth Drivers:
- CTV: Ad spend is expected to grow from $23.6 billion in 2024 to $26.6 billion in 2025, a 13% increase.
- Social Video: Projected to reach $27.2 billion in 2025, up from $23.7 billion in 2024, marking a 15% growth.
- Online Video: Anticipated to rise from $16.6 billion in 2024 to $18.6 billion in 2025, a 12% increase.
The surge in digital video ad spend is attributed to several factors, including the resurgence of live events and sports programming on streaming platforms, advancements in advertising technology, and the expansion of self-serve and programmatic ad tools. These developments have made digital video advertising more accessible and effective for brands of all sizes.
Industry Implications:
The shift towards digital video is prompting advertisers to reallocate budgets from traditional channels. In 2025, 36% of CTV ad spend is expected to come from funds previously allocated to linear TV, with another 36% redirected from social media and other digital channels. This reallocation reflects growing confidence in digital video’s ability to deliver targeted, high-impact campaigns.
Key Takeaway:
Digital video advertising is rapidly becoming the dominant force in the TV/video ad landscape. With continued growth in CTV, social video, and online video, brands are increasingly prioritizing digital platforms to reach and engage audiences effectively. This trend underscores the importance of adaptable, data-driven strategies in the evolving advertising ecosystem.