The streaming and digital video ad ecosystem is experiencing rapid evolution, marked by a 16% YoY growth in Connected TV (CTV) advertising in 2024. According to the 2025 Digital Video Ad Spend & Strategy Report: Part One by IAB, this growth is propelled by a combination of increased live content on streaming platforms and the expansion of programmatic and self-serve advertising tools. The report, developed with Advertiser Perceptions and Guideline, offers vital insights into U.S. video ad spend across CTV, social video, and online video.
CTV Emerges as a Dominant Channel in Digital Advertising
- Live events and sports fuel CTV resurgence:
Streaming platforms capitalized on a growing appetite for live sports and entertainment, driving a 16% YoY increase in CTV spend. - Self-serve and programmatic tools expand access:
Lower entry barriers through automation and self-serve interfaces enabled more advertisers, including SMBs, to invest in CTV. - CTV is now foundational for advertisers:
CTV, along with social and online video, is no longer experimental—it’s a core component of integrated media strategies.
Digital Video Overtakes Linear TV as Primary Spend Channel
- Digital video reaches 60% of total video ad spend in 2025:
This marks a doubling from five years ago and reflects a permanent shift in audience attention and advertiser dollars. - Ad spend rose 18% in 2024 to $64B:
Projected to hit $72 billion in 2025, digital video is outpacing total media growth by a factor of two to three. - CTV, social, and online video all saw double-digit growth:
Advertisers are responding to audience fragmentation with platform-agnostic video strategies powered by precise targeting.
CPG, Retail, and Pharma Lead Digital Video Investment
- Double-digit budget increases projected for 2025:
- CPG: +13%
- Retail: +18%
- Pharma: +19%
- AI-driven personalization boosts effectiveness:
These verticals are leveraging real-time data, shoppable formats, and smart targeting to maximize ROI and engagement.
SMBs Embrace CTV Through Programmatic Self-Serve Tools
- CTV is no longer reserved for big brands:
Thanks to tools that simplify campaign creation and management, SMBs are increasingly investing in streaming TV ads. - Reallocation of budgets from linear and social:
36% of CTV ad budgets in 2025 come from former linear TV and social media spending, as advertisers seek better targeting and ROI. - Outcome-based advertising is gaining traction:
The ability to tie ad spend directly to business outcomes is empowering smaller players to compete effectively in the CTV space.
Industry Outlook: Growth Amid Uncertainty
- 2024 marked a pivotal year for video advertising:
Quality content migration to streaming, tech innovation, and inventory expansion triggered accelerated growth. - 2025 brings opportunities and challenges:
Despite strong momentum, factors such as geopolitical instability, tariffs, and shifting consumer confidence may impact spend. - IAB sees continued transformation:
“CTV and social video are now foundational,” said Chris Bruderle, VP at IAB, emphasizing their importance in holistic ad strategies.
CTV and digital video are not just growing—they’re redefining the digital ad landscape. From enhanced measurement to greater accessibility for SMBs, the ecosystem is undergoing a democratization powered by technology, content, and changing viewer habits. As we move into 2025, brands across sectors must prioritize CTV, social, and online video as key elements in any media strategy designed for scale, precision, and performance.
