Animation and visual effects are becoming increasingly intertwined with the technologies powering modern advertising and digital media. A ResearchAndMarkets report examining the global animation and VFX industry highlights a familiar transformation: streaming, cloud rendering, immersive formats and distributed production are changing how visual content is created and delivered. Since that report covers trends through 2026, some of its conclusions now sit alongside a newer development—the rapid emergence of generative AI as another layer in the production stack.
The economics of visual content are changing as quickly as the formats used to consume it.
Animation and visual effects once belonged primarily to film studios, television networks and specialist production houses. Today, the same underlying technologies support streaming entertainment, gaming, advertising, social video, virtual production, augmented reality (AR) and virtual reality (VR).
That expansion is creating pressure on studios and agencies to produce more sophisticated visual experiences across more screens while controlling production costs and turnaround times.
A ResearchAndMarkets report titled Global Animation & VFX: Strategies, Trends & Opportunities (2022-26) highlights several forces behind that transformation, including streaming video, cloud computing, globalized production, immersive media and the convergence of animation with live-action content.
The report’s original outlook is particularly relevant to advertising technology because visual content has become an essential component of digital campaigns. Brand marketers increasingly need video assets adapted for connected TV, social platforms, digital out-of-home advertising, mobile devices and immersive environments.
That creates a production challenge: the more channels advertisers use, the more versions of an asset they may need.
Streaming Changed the Economics of Visual Content
Streaming has fundamentally expanded the demand for animation and VFX.
Netflix, Amazon and other streaming platforms helped normalize high-quality visual storytelling outside the traditional theatrical and broadcast ecosystem. Meanwhile, YouTube, Twitch and social networks created enormous demand for shorter, frequently updated video content.
The result is a production environment where studios and creators have to balance cinematic quality with speed.
For advertisers, that tension is especially pronounced. Campaigns can require multiple aspect ratios, languages, audience variations, product versions and platform-specific creative. A production workflow built around lengthy manual processes can struggle to scale when content requirements multiply.
The ResearchAndMarkets report identifies short-form production as an important industry trend, reflecting changing viewing habits and the economics of digital distribution.
The development also fits into a broader expansion of the animation and VFX market. Mordor Intelligence estimates the global animation and VFX market at $197.3 billion in 2025, projecting it to reach $348.5 billion by 2030, representing a 12.05% CAGR. (researchandmarkets.com)
Market estimates vary significantly depending on how researchers define animation, VFX, software, services and related production activities. That makes individual market-size figures less useful than the underlying direction: visual production is becoming more technology-intensive and increasingly distributed across industries.
Cloud Rendering Is Changing Production Infrastructure
One of the most important changes is happening beneath the creative layer.
Traditional animation and VFX workflows have historically depended on expensive local rendering infrastructure. Cloud computing introduces a more elastic model in which studios can access additional compute capacity when production workloads increase.
That matters because rendering can create unpredictable infrastructure requirements. A studio may need substantial processing power during a production deadline but far less capacity between projects.
Cloud infrastructure can therefore shift part of the cost structure from fixed capital expenditure toward consumption-based operating expenditure.
It can also support distributed production teams. Artists, developers and technical specialists can work across geographic locations while accessing shared production resources.
The model is particularly relevant to advertising agencies and media companies managing fluctuating creative workloads.
AI Is Becoming the Next Production Layer
The original market outlook predates the latest acceleration in generative AI, making AI the biggest area where the industry’s trajectory has moved beyond the report’s original framing.
Generative AI is now being explored across concept development, character creation, background generation, animation and visual-effects workflows.
Grand View Research estimates the global generative AI in animation market was worth $652.1 million in 2024 and projects it to reach $13.4 billion by 2033, representing a CAGR of roughly 39%. The research identifies automation of tasks such as character design, background creation and complex animation as major drivers. (grandviewresearch.com)
That does not mean AI is replacing the traditional production pipeline wholesale.
Instead, the more immediate change is workflow augmentation. AI can potentially reduce the time required for repetitive tasks, accelerate ideation and allow creative teams to iterate more quickly.
For advertising organizations, that could have a direct effect on creative versioning. A campaign that previously required separate manual production for multiple markets could increasingly incorporate AI-assisted processes for adaptation, localization and early-stage concept development.
But the technology introduces new questions around copyright, consistency, provenance, brand safety and creative control. Those concerns are particularly important for enterprise advertisers that need reproducible, legally defensible production workflows.
Virtual Production Brings VFX Closer to the Camera
Another major shift is the growth of virtual production and in-camera VFX.
Instead of generating every environment after filming, production teams can use real-time rendering and LED stages to place actors within digitally generated environments during the shoot.
Grand View Research estimates the global virtual production market reached $2.8 billion in 2025 and projects it to reach $12.3 billion by 2033, representing a 20.4% CAGR. The firm identifies LED volume stages, real-time game engines, AI-assisted content creation and remote production as major market drivers. (grandviewresearch.com)
For advertising, virtual production can shorten location-dependent workflows and make it easier to create controlled environments for commercials, branded content and product campaigns.
It also moves visual effects closer to the production stage, allowing creative teams to see and adjust digital environments in real time.
What It Means for AdTech
The significance for AdTech extends beyond the production studio.
Advertising technology has traditionally focused on buying, targeting and measuring media. But as visual content becomes more dynamic and personalized, the boundary between creative technology and media technology is becoming less distinct.
AI-assisted creative generation, cloud production, virtual production and automated content adaptation can become part of the same workflow as campaign management and audience targeting.
That could eventually produce a more integrated advertising pipeline in which creative assets are generated, adapted, distributed and measured with greater automation.
For agencies, publishers and enterprise marketing teams, the competitive advantage may therefore shift from simply having access to advanced creative tools to having the infrastructure and governance needed to connect those tools to the broader advertising stack.
The ResearchAndMarkets report captures the earlier stages of this transformation. The industry’s next phase is being shaped by a more complex combination of AI, cloud computing, real-time rendering, streaming distribution and immersive media.
Animation and VFX are no longer isolated production disciplines. They are becoming technology-intensive components of the wider digital media economy.
Market Landscape
The animation and VFX sector is increasingly fragmented across entertainment, gaming, advertising, streaming and immersive experiences. The original ResearchAndMarkets report highlighted streaming, distributed production, cloud rendering and AR/VR as major forces through 2026.
Current market research suggests that several of those trends are accelerating. Grand View Research projects the virtual production market to grow from $2.8 billion in 2025 to $12.3 billion by 2033, while its generative-AI-in-animation research forecasts growth from $652.1 million in 2024 to $13.4 billion by 2033.
The numbers cover different segments and should not be combined into a single industry valuation. Together, however, they demonstrate the increasing investment in technologies that automate, accelerate or restructure visual production.
For AdTech, this matters because creative production is increasingly becoming a scalable technology problem. Advertising teams need assets for more platforms, audiences and formats, while media networks need content capable of adapting to increasingly dynamic environments.
Top Insights
- Cloud rendering and virtual production are reducing dependence on fixed production infrastructure while giving studios and agencies greater flexibility across fluctuating creative workloads.
- Generative AI is becoming a new animation technology layer, automating selected creative tasks while raising questions about copyright, provenance, consistency and brand governance.
- Streaming, social media and gaming have expanded demand for high-quality visual content, increasing pressure on producers to deliver assets faster and across more formats.
- Virtual production is connecting real-time rendering, LED stages and VFX, creating new opportunities for advertisers producing controlled, adaptable branded environments.
- For AdTech teams, the convergence of creative automation and media automation could bring content production closer to campaign targeting, distribution and measurement.
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