As the media landscape continues to evolve in 2025, digital video advertising is emerging as a dominant force in the industry. According to the Interactive Advertising Bureau (IAB), this sector is projected to reach an impressive $72.4 billion by the end of the year, marking an increase from the previous year’s expenditure of $63.8 billion. This growth highlights the increasingly significant shift from traditional linear TV advertising to digital formats, with digital video ad spend now capturing 58% of the overall video advertising market. The categories pushing this growth—connected TV (CTV), social video, and online video—are shaping advertisers’ strategies, indicating a profound change in how consumers engage with media. As consumer behavior shifts towards digital consumption, brands are keen to adapt, leveraging innovative tools and platforms to reach their audiences effectively. Industry experts are monitoring these trends closely, as they not only signal changes in advertising budgets but also reflect evolving preferences among viewers.
The Rise of Connected TV
Connected TV (CTV) is at the forefront of digital video ad spending, signaling its significant impact on media plans among marketers. The appeal of CTV is underscored by 68% of marketers who now describe it as a “must-buy” for their media strategies. This popularity can be largely attributed to the development of programmatic tools that allow for greater flexibility and targeting options, thereby enhancing the effectiveness of advertising campaigns. The CTV ad spend is expected to grow by 13% this year, reaching an estimated $26.6 billion. This expansion highlights that advertisers recognize the value of CTV as a critical avenue to captivate viewers in an ever-changing digital environment.
Additionally, CTV’s rise is influencing how marketers allocate their budgets, with 36% planning to increase CTV expenditures by reallocating resources from traditional linear TV, social media budgets, and paid search. This reallocation reflects broader trends within digital advertising, which continue to diversify as brands seek to optimize their spend based on consumer behavior and technological advancements. The movement towards CTV exemplifies how brands are strategically aligning their advertising efforts with the platforms most frequented by their target audiences, capitalizing on the precise measurement tools offered by digital mediums.
Impact on Social and Online Video
While CTV is leading the charge, social video and online video remain significant contributors to the digital video advertising landscape. The report forecasts that social video will be the largest category in the digital ad space, projected at $27.2 billion. This platform remains a primary destination for advertisers looking to engage audiences through highly shareable and interactive content. The ongoing evolution of social media features allows brands to craft engaging narratives that capture viewers’ attention in creative ways, fostering direct interaction and brand loyalty.
Online video closely follows as another pivotal category, expecting to reach $18.6 billion in ad spending. This arena is characterized by its vast reach across various digital properties, connecting advertisers with diverse consumer segments. The impact of these platforms has enhanced advertisers’ capabilities to deliver personalized content tailored to individual preferences. As technology tools become more sophisticated, brands are increasingly adept at utilizing data analytics to drive their strategies, ensuring their messages resonate with audiences across different mediums. This shift towards personalized engagement is crucial in maintaining relevance amidst an overcrowded media landscape.
Future Trends in Digital Advertising
In 2025, the media landscape is experiencing a transformation, with digital video advertising rising as a key player. The Interactive Advertising Bureau (IAB) projects that this sector will reach a substantial $72.4 billion by year-end, up from $63.8 billion the previous year. This growth underscores a marked transition from traditional linear TV to digital formats, as digital video advertising accounts for 58% of the total video ad market. The main drivers of this growth—connected TV (CTV), social video, and online video—are reshaping advertisers’ approaches and showing a significant change in consumer media interaction. As consumers gravitate towards digital media, brands are eager to adapt, using cutting-edge tools and platforms to connect with their target audiences effectively. Industry observers are keeping a close watch on these evolving trends, as they signify not only a shift in advertising expenditures but also a reflection of changing viewer preferences, indicating a deeper engagement with digital content consumption.
