Dive Brief:

• Digital video ad spend is projected to hit $72.4 billion in 2025, up 14% from the $63.8 billion spent in 2024, according to new research from the Interactive Advertising Bureau (IAB). The digital video category includes connected TV (CTV), social video and online video.
• Last year marked the first time digital video ad spending outpaced linear TV, capturing 51% of the total. The trend is expected to continue in 2025, with digital projected to account for 58% of video spending.
• CPG brands are predicted to spend $14.3 billion in 2025, a 13% increase from 2024, making it the category with the largest digital video ad spend. Retailers are expected to spend $8.4 billion, an 18% increase from the year prior.

Dive Insight:

Digital video is poised for growth in 2025, with most categories expected to increase spending by double digits, according to the IAB’s “2025 Digital Video Ad Spend & Strategy Report.” Additionally, CTV is growing in importance for many marketers, with 68% saying it's a “must buy” for their media plans. The growing importance of the channel is largely due to CTV’s efforts to scale programmatic tools, providing marketers with greater flexibility and other advancements.

IAB’s report includes data from an online survey fielded between Feb. 17, 2025 and March 17, 2025. The survey was administered to those who work directly with a brand or through an agency, spent at least $1 million on advertising in 2024 and are involved with digital video. There were a total of 364 respondents.

While all digital video platforms measured in the study (CTV, social video and online video) are expected to see double-digit growth in 2025, CTV has proven to be a particular standout. With a 13% growth projected in 2025, CTV ad spend is expected to hit $26.6 billion. This makes it 43% larger than online video, which is expected to hit $18.6 billion. Social video is projected to be the largest category, at $27.2 billion.

CTV’s boom could spell trouble for other channels, according to the report. Thirty-six percent of marketers planning to increase CTV spend expect to source their funding from linear TV budgets. The same percentage (36%) plan on sourcing from social media budgets while 32% indicate they plan to pull from paid search.

Digital video’s growth tracks with digital advertising’s growth broadly. In 2024, digital advertising grew 14.9% year over year, hitting $258.6 billion. This was due to several factors, including spending diversification.