Dive Brief
Digital video ad spending is forecasted to reach an impressive $72.4 billion in 2025, marking a 14% increase from the $63.8 billion projected for 2024, according to the latest research from the Interactive Advertising Bureau (IAB). This surge encompasses various segments, including connected TV (CTV), social video, and online video.
2024 was a landmark year, as digital video ad spending officially surpassed linear TV for the first time, capturing 51% of the total market share. The momentum is expected to continue, with digital video projected to account for 58% of video expenditure in 2025.
- In the consumer packaged goods (CPG) sector, brands are slated to invest $14.3 billion in digital video advertising in 2025, which translates to a 13% increase from 2024. Meanwhile, retailers are anticipated to pour $8.4 billion into digital video, reflecting an 18% rise over the previous year.
Dive Insight
The future of digital video looks bright, with the IAB’s “2025 Digital Video Ad Spend & Strategy Report” indicating that most categories are set to increase their advertising budgets by double digits in 2025. Notably, connected TV is emerging as a critical platform for advertisers, with 68% of marketers deeming it a “must buy” for their media strategies. This growing trend is largely attributed to CTV’s advancements in programmatic tools, which offer marketers increased flexibility and efficacy.
Background of the Research: The IAB report draws insights from a comprehensive online survey conducted between February 17, 2025, and March 17, 2025. The respondents were predominantly professionals involved with brands or agencies that spent at least $1 million on advertising in 2024, totaling 364 participants.
CTV: A Standout Player
While all digital video platforms, including CTV, social video, and online video, are set to experience substantial growth in 2025, connected TV is the star of the show. Projections suggest that CTV ad spending will rise by 13%, reaching $26.6 billion—making it 43% larger than online video, which is expected to hit $18.6 billion. Meanwhile, social video is anticipated to dominate the category with projected spending of $27.2 billion.
Shifting Budgets
The meteoric rise of CTV comes with implications for traditional advertising channels. According to the report, 36% of marketers planning to boost their CTV budgets anticipate reallocating funds from their linear TV budgets, while the same percentage is expected to draw funds from social media budgets. Furthermore, 32% are considering pulling resources from paid search campaigns.
The Bigger Picture
The growth trajectory of digital video reflects a broader surge in digital advertising overall. In 2024, digital advertising witnessed an astounding 14.9% year-over-year growth, achieving $258.6 billion in total spending, thanks in part to diversified advertising investments (source).
In conclusion, the future is undeniably digital, and video advertising is leading the charge. Whether through CTV, social, or online video, brands are positioning themselves to leverage the dynamic landscape of digital marketing. As we move into 2025, the adaptability and foresight of marketers will play a critical role in harnessing these opportunities for growth.
