IAB Forecasts Digital Video Ad Spending To Keep Growing In 2025.

The radio industry may get most of its money from audio ads, but digital sales has also allowed broadcasters to go after video ad budgets that had been out of reach before. There is good news for stations that are selling video ads on their websites. The Interactive Advertising Bureau reports digital video spending is projected to grow 14% this year to $72 billion. That is two to three-times faster than total media overall, despite a slightly slower pace of growth from last year’s 18% increase.

“2024 was a pivotal year for digital video advertising.” said David Cohen, CEO of the IAB. “With high-quality content moving to streaming, advancements in advertising technology, and an influx of new inventory accelerated growth for both consumers and advertisers,” he said in a statement.

The IAB says the increase is driven by digital video’s ability to deliver engaging, personalized, and shoppable experiences across platforms, formats, and devices. However, due to ongoing economic uncertainty including tariffs, geopolitical conflict, and changing consumer sentiment, the IAB also says this year’s market is “more dynamic” than normal so the ground underneath its forecast isn’t as stable as a year ago.

Yet the report, developed in partnership with Advertiser Perceptions and Guideline, shows a clear shift in momentum as digital video is expected to capture nearly 60% of total TV/video ad spend in 2025, more than double its share from just five years ago. The growth builds on what analysts say was a major turning point last year, when digital video surpassed broadcast TV ad revenue for the first time.

“In 2025, digital video’s lead is expected to grow even more as linear TV will not have the U.S. presidential elections nor the Olympics to generate spend,” says the report.

As the digital video marketplace continues to grow, more ad categories are ramping up their spending to connect with consumers where they watch content the most. In 2025, most major categories are set to increase digital video ad budgets by double-digits with CPG (13%), retail (18%), and pharmaceutical (19%) leading the way.

There are differences in how each uses digital video. The report says retail, auto, and restaurant brands prioritize real-time, location-based messaging paired with shoppable ad formats But pharma brands are increasingly leveraging AI and data to personalize messaging.

The radio industry has another reason to embrace digital video ads on their websites. The IAB report asked advertisers how they are funding their increased spending on CTV. It is not a surprise that the top source is broadcast TV, reflecting the shift from traditional to digital video platforms. The report also shows online video spending is pulling from across the media plan, which the IAB says reflects growing confidence in CTV’s ability to deliver targeted, high-impact campaigns, now made even more accessible through programmatic and self-serve tools. 

The IAB says more than a quarter (27%) said that they were pulling money out of digital audio and audio podcast ads to put help fund their CTV ad spending online. That is actually fewer than the number pulling money from social media, paid search, display ads, or digital out-of-home, but it shows no channel is safe from the lure of digital video at the moment. The good news is that the IAB also reports that more than a third (36%) of advertisers said they are increasing their overall media budgets to pay for digital video ads in 2025.

“CTV is making it clear it’s a go-to channel for both viewers and advertisers and is expected to continue growing along with social video and online video,” Cohen said.