U.S. connected TV ad spending is projected to grow by 13% this year to $26.6 billion, and the channel is now the top-ranked “must buy” among advertisers, according to the first of two installments of the Interactive Advertising Bureau’s 2025 Digital Video Ad Spend and Strategy Report.
Partnering with Advertiser Perceptions and Guideline, IAB surveyed 364 U.S. advertisers from February - March and found that 68% listed CTV as most necessary for a media plan, followed closely by social video. (IAB groups CTV, social video and online video into the “digital video” category).
CTV returned to double-digit percent growth in 2024 with 16% YoY growth to reach $24 billion last year, after trailing online and social video in 2023 with just 9% growth.
“CTV benefited from multiple tailwinds in 2024, which enabled it to drive more ad spend: The actor and writer strikes ended which enabled show production to continue,
premiere live sports and events aired exclusively on streaming platforms, and those same platforms stood up and scaled programmatic and self-serve activation tools making it easier for brands of all sizes to invest their ad dollars more seamlessly,” IAB said.
In total, digital video is expected to generate around $74.2 billion in U.S. ad spending this year, up 14% YoY. While still growing, that’s actually a deceleration — marking the slowest growth rate dating back to 2020.
Digital video is expected to account for 58% of total ad spending in 2025 vs. just 42% for linear video, IAB said. Illustrating that shift, traditional pay TV’s share of total U.S. video subscription revenue fell below 50% in 2024 while streaming platforms pulled ahead, the report added. The pay TV ecosystem lost 8.4 million subscribers in 2023 and another 6.3 million last year.
“In 2025, digital video’s lead is expected to grow even more as linear TV will not have the U.S. presidential elections nor the Olympics to generate spend,” IAB said.
Meanwhile, consumer packaged goods (CPG) brands remain the biggest digital video spenders, projected by IAB to increase their outlay on the category by 13% to $14.3 billion this year.
Part two of the IAB’s report, focusing on the strategies behind the aforementioned growth rates, will be published on July 14th during the IAB Media Center’s Video Leadership Summit.