US Television and Video Advertising Shifts Primarily towards Digital, Accounting for 58% in 2025 Spending
Digital Video Advertising Takes Center Stage
In a rapidly evolving media landscape, digital video advertising is making a significant impact, capturing an increasing share of TV/video ad budgets.
According to the Interactive Advertising Bureau (IAB), digital video is projected to command 58% of all TV/video ad spend by 2025. This growth is primarily driven by technological advancements like AI-driven ad creation and programmatic buying, the rise of connected TV (CTV) viewing, and shifting consumer behavior towards streaming formats.
One of the key factors fueling this growth is the growth of connected TV and streaming platforms. There has been a 46% increase in CTV hours watched year-over-year, driving brands to invest more in targeted video campaigns on streaming platforms like Netflix and Amazon Prime Video. OTT (over-the-top) video revenues are expected to grow significantly, with ad-supported video on demand (AVOD) increasing in market share within total streaming revenues.
The integration of AI tools has also played a crucial role. By 2026, nearly 90% of advertisers are expected to use AI to create and optimize video ads, enabling hyper-personalization and efficient campaign management. This has led to faster, more creative video ad production and improved attribution of ad effectiveness.
Brands across various sectors, including consumer packaged goods (CPG), retail, tech, and pharmaceutical, are among the fastest-growing investors in digital video in 2025. CPG brands use addressable CTV to deliver product tutorials, demo-driven storytelling, and limited-time offers. Pharmaceutical advertisers apply strict compliance playbooks to deploy educational video messages across devices.
Retail marketers also leverage digital video to synchronize TV-style creative with in-store promotions through geo-fenced streaming activations. Despite some divergent approaches among brands, a majority of top advertisers are increasing their TV ad spend to capture streaming audiences. The overall confidence in digital and connected TV advertising is rising in a competitive media landscape.
Digital video spans long-form streaming, short social clips, and interactive shoppable ads. In 2025, social video spend alone reached $27.2 billion, while CTV spend rebounded to $26.6 billion. By 2025, digital video ad spend is projected to reach $72.4 billion, a 14% increase from 2024.
Brands that master the interplay of programmatic precision, cross-format storytelling, and outcome-driven measurement will lead the market. Senior marketers can harness video's full potential and drive sustained business impact by aligning budgets, capabilities, and creative to a digital-first reality.
However, it's important to note that perceived content quality is the top criterion when evaluating video channels. Failure to deliver business outcomes is the leading cause for budget reductions or reallocations. As such, senior social media and influencer marketing professionals should rebalance their media mix towards digital, invest in unified measurement, build agile creative workflows, and deepen their programmatic expertise.
Traditional linear TV has seen its share of total video ad spend erode continuously, dipping below half in 2024. The growth rate of digital video ad spend is two to three times faster than total media markets. By 2027, the IAB forecasts digital video could approach 65% of total TV/video ad spend.
In conclusion, the rise of digital video advertising is a response to evolving consumer viewing habits, technological innovation, and strategic advertiser investment. As we move towards a digital-first reality, understanding and adapting to these trends will be crucial for businesses looking to maximize their advertising spend and drive sustained business impact.
[1] eMarketer, "OTT Video Revenues to Reach $116.4 Billion Worldwide in 2025", 2021. [2] AdAge, "Why Connected TV Is the Next Frontier for Advertisers", 2020. [3] Forbes, "The Rise of AI in Advertising: Opportunities and Challenges", 2020. [4] IAB, "IAB UK Video Ad Spend Report 2021", 2021.
- The integration of technology, such as AI-driven ad creation and programmatic buying, is revolutionizing education-and-self-development opportunities for marketers by enabling hyper-personalization and efficient campaign management in the field of finance.
- With a 46% increase in connected TV (CTV) hours watched, entertainment platforms are shifting towards streaming formats, opening up new avenues for brand exposure and lifestyle promotion.
- The rise of digital video advertising is profoundly impacting the general-news landscape, as video platforms like Netflix, Amazon Prime Video, and social media networks become significant platforms for news broadcasting and dissemination.
