A visualization of the key trends in advertising growth for 2025 as presented in the IAB study.
The IAB’s new study projects a 7.3% growth in ad spend for 2025, highlighting key sectors like retail media and connected TV. The report also emphasizes the increasing importance of customer acquisition amidst economic challenges and the cautious integration of generative AI in advertising strategies.
The Interactive Advertising Bureau (IAB) has just released its exciting new study titled “2025 Outlook: A Snapshot into Ad Spend, Opportunities, and Strategies for Growth”. This latest report, unveiled on January 16, 2025, is buzzing with insights about how the advertising world is shaping up for this year and beyond.
First off, the study reveals a modest overall growth in ad spend for 2025, projected at 7.3%. While this number is lower than the impressive growth we saw in 2024—thanks to the Olympic Games and the presidential election—it’s still promising given the current economic climate. It indicates that advertisers are still keen on maintaining their advertising budgets, even if growth isn’t skyrocketing.
Diving deeper, we find that not all sectors are growing at the same pace. One area really standing out is retail media, which is expected to soar with an impressive growth rate of 15.6%. This sector is proving to be a golden opportunity for brands eager to reach consumers in innovative ways as they shop online. Connected TV (CTV) is another star player anticipated to grow by 13.8%. With more viewers opting for streaming over traditional cable, businesses are taking note and adjusting their advertising strategies accordingly.
Social media is also hot on the heels with an increasing investment in ads, expected to grow by 11.9%. Clearly, platforms where consumers are most engaged continue to be key assets for brands.
What’s driving these advertising decisions? As the study pointed out, buyer priorities for growth are heavily centered on customer acquisition. This focus has surged by 12% year-over-year, as companies face pressures from inflation and tightening profit margins. It’s all about finding the right strategies to attract and retain customers in a competitive landscape.
Of course, it’s not all smooth sailing. The advertising ecosystem is more fragmented than ever, thanks to signal loss and those pesky walled gardens that complicate tracking. As a result, buyers are reevaluating their marketing mix models (MMM) to effectively navigate this changing landscape. Measurement is another tough spot, especially when it comes to accurately gauging performance across different platforms in video streaming.
The study also highlights an interesting trend toward the integration of generative AI in advertising strategies. A remarkable 80% of surveyed buyers are either already using (42%) or exploring (36%) generative AI for their media planning and activation. It’s clear that AI is beckoning advertisers with new possibilities, but buyers are treading carefully.
Half of those utilizing generative AI are insisting on important human oversight and brand safety protocols. It seems brands are keen on leveraging technology without losing that crucial human touch or the trust of consumers. However, the study also uncovered that only a third of companies using generative AI have structured resources for collaborative efforts within their organizations.
The IAB CEO David Cohen shared some encouraging thoughts, emphasizing the importance of transparency, choice, and achieving effective business results to keep buyer optimism alive and kicking. As we move further into 2025, the findings of this report promise to guide brands as they navigate the evolving advertising landscape.
For those who love to dig deeper into these insights, the full findings of the “2025 Outlook” study are available through IAB’s official channels. It’s an exciting time in the advertising world, and with these trends in mind, who knows what innovative strategies brands will roll out next!
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