IAB Report Highlights Optimism in Digital Advertising with Double-Digit Growth for Retail Media, CTV, and Social

Overall ad spend to grow 7.3% in 2025

NEW YORK, Jan. 16, 2025 /PRNewswire/ -- Today, IAB released its latest study, "2025 Outlook: A Snapshot into Ad Spend, Opportunities, and Strategies for Growth" offering an early glimpse into ad spending trends for the coming year. The study is based on a survey of buyers at brands and agencies to understand their growth strategies, anticipated spend by channel, and the challenges they foresee.

Double-Digit Growth Projected for CTV, Social Media, and Retail Media
While overall ad spend growth is projected to be lower than 2024, which surged due to the Olympics and the Presidential election, it remains positive with an anticipated modest growth of 7.3%. Retail media is projected to grow at more than twice the rate of spend overall (+15.6%). CTV expects double-digit growth (+13.8%), as does social (+11.9%).

"This report clearly shows that budgets are being focused at the points where consumers, commerce, and video converge — where advertisers can leverage the power of sight, sound, and motion and consumers can engage or transact," said David Cohen, CEO, IAB. "Advertisers are starting the year looking for growth, and investing in channels that drive the most meaningful business results."

Buyers Pursue Growth Amid Inflation, Fragmentation, and Persistent Measurement Challenges
Buyers' goals, as in previous years, span the entire purchase funnel. But customer acquisition remains the top priority, increasing 12% year-over-year as buyers seek revenue growth to offset shrinking margins from ongoing inflation.

In addition, the increasingly fragmented ad ecosystem compounded by signal loss and the proliferation of walled gardens has the buy-side revisiting and evolving marketing mix models (MMM) along with tactics to improve reach and frequency.

Concerns about deduplication, incrementality, and measurement remain, particularly in video streaming where the growth buyers are excited about also fuels their top concern - cross-platform measurement.

80% of Buyers are Using or Exploring Generative AI in Media Planning and Activation
The adoption of generative AI in media planning is growing, with nearly 8-in-10 buyers already using (42%) or exploring (36%) the technology for media planning and/or activation. Half of users are already insisting on mandatory human oversight and clear brand safety protocols to protect against misuse, inaccuracies, and other risks. 

While the excitement for Gen AI is high, it is still early days for the companies leveraging it. Only one-third of the companies using it have organized, collaborative resources in their organizations. There is still a lot of opportunity for companies to drive efficiencies and growth.

"Thoughtful buyer optimism is always a good way to start the year," continued Cohen. "And the smartest way for the industry to keep that alive, is to give advertisers the transparency, choice, and business results they're looking for. The market waits for no one - we must keep pushing forward."

The full "2025 Outlook: A Snapshot into Ad Spend, Opportunities, and Strategies for Growth" study is available here.

About IAB
The Interactive Advertising Bureau empowers the media and marketing industries to thrive in the digital economy. Its membership comprises more than 700 leading media companies, brands, agencies, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.

SOURCE Interactive Advertising Bureau (IAB)