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The Interactive Advertising Bureau (IAB) has created its latest report, offering a detailed look at ad spending trends for 2025.
Released on 16 January, the “2025 Outlook: A Snapshot into Ad Spend, Opportunities, and Strategies for Growth” survey examines the strategic priorities and growth areas that will dominate the industry in the coming year.
Modest Growth Expected Amid Economic Shifts
IAB’s latest report forecasts ad spend growth will decelerate in 2025 following the exceptional growth in 2024, which benefitted from the Olympics and the U.S. Presidential election.
Nonetheless, the outlook remains positive, with total ad spend expected to rise by 7.3%. Digital channels are expected to see substantial growth, with retail media projected to increase by 15.6%, CTV rising by 13.8%, and social media growing by 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 of IAB. “Advertisers are starting the year looking for growth, and investing in channels that drive the most meaningful business results.”
Advertisers Focus on Customer Acquisition
Customer acquisition remains a primary focus for marketers, reflecting a 12% increase in spending year-on-year as they look to offset shrinking profit margins due to inflation.
However, the ad landscape is becoming more challenging, with the rise of walled gardens and signal loss complicating the management of marketing strategies. Advertisers are adjusting their approaches to improve reach and frequency as digital platforms fragment further.
Measurement continues to be a pressing issue, especially in video streaming, where cross-platform measurement, deduplication, and incrementality tracking are key areas of concern. Accurate measurement and attribution are top priorities for many buyers, despite the strong investment in CTV and social media,
Generative AI Adoption Grows
IAB’s study shows that generative AI is becoming central to media planning, with 80% of buyers either already using (42%) or exploring (36%) AI to optimise their ad strategies. However, many companies are still at the early stages of AI adoption. Concerns over misuse, inaccuracies, and risks have prompted 50% of AI users to implement human oversight and brand safety measures. While enthusiasm for AI is high, only a third of organisations have structured, collaborative resources for its effective implementation.
“Thoughtful buyer optimism is always a good way to start the year,” Cohen commented. “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.”