Generative AI Gains Ground in Digital Video Advertising
A growing number of ad buyers are turning to generative artificial intelligence (AI) for digital video creation, according to recent findings from the Interactive Advertising Bureau (IAB). The report reveals that over half of advertisers now use generative AI in some capacity for video production, with 30% of digital video ads currently being developed or enhanced by AI tools. This figure is projected to rise to 39% by 2026, signaling a major shift in how marketers approach content creation.
The adoption rate is particularly high among small and midsize brands. By 2026, 45% of digital video ads from small brands are expected to be created using generative AI, while midsize brands anticipate a 42% adoption rate. In contrast, only 36% of larger brands foresee incorporating AI into their video strategies by the same year.
Smaller Brands Lead in AI Integration
Part two of the IAB’s “2025 Digital Video Ad Spend & Strategy Report,” developed in collaboration with Advertiser Perceptions and Guideline, highlights the growing reliance on generative AI among smaller firms. These businesses often face limited resources and tighter budgets, making AI an attractive solution for scaling content production and enhancing creative output.
One of the key advantages of using generative AI is the ability to produce multiple versions of the same video tailored to different audience segments. According to the report, 42% of advertisers currently using or planning to use AI aim to create personalized ad versions for various demographics. Additionally, 38% use AI to alter visual styles, while 36% focus on improving contextual relevance.
CTV Emerges as a Key Digital Video Channel
The report also sheds light on the evolving role of connected TV (CTV) in the digital video ecosystem. CTV is increasingly viewed as a critical platform for marketers, rivaling social media video in importance. This year, buyers expect 47% of CTV inventory to be biddable, a significant increase from 34% in 2024. The shift reflects growing interest in programmatic advertising methods, which are now responsible for 85% of CTV transactions—a 10-point increase over the previous year.
Programmatic buying offers several benefits, including improved return on investment and better scalability. In fact, 41% of buyers believe programmatic CTV purchases will yield stronger ROI, while 35% think it will help achieve broader campaign reach. However, as Jamie Finstein, vice president of the Media Center at the IAB, noted, “Being available programmatically is table stakes. Being a strategic partner who delivers ideas and results is becoming what’s vital to win ad spend.”
Challenges Persist for Smaller Advertisers
Despite the advantages, smaller brands face notable challenges in leveraging CTV effectively. The report reveals that 38% of small-scale advertisers experience measurement issues, compared to 27% of mid-tier and 31% of large advertisers. These difficulties are often amplified by a focus on bottom-funnel performance metrics and limited internal resources.
As CTV becomes more integral to media strategies, the dynamics between buyers and sellers are also evolving. The report finds that 83% of buyers believe human involvement remains essential for customizing CTV deals. Furthermore, 74% of respondents plan to invest in in-house capabilities to manage self-service CTV platforms, indicating a shift toward more autonomous and flexible media buying practices.
The Future of AI and CTV in Advertising
Looking ahead, the integration of generative AI and the expansion of CTV capabilities are expected to shape the future of digital video advertising. As more brands, particularly those with limited resources, adopt AI to streamline content creation and maximize efficiency, the technology will likely become a cornerstone of marketing strategies.
Similarly, the continued growth of CTV as a preferred channel for video ad placements suggests that advertisers will increasingly allocate budgets toward platforms that offer both reach and precision. While challenges remain, particularly for smaller players, the overall trajectory points to a more data-driven, automated, and personalized advertising landscape.
This article is inspired by content from Original Source. It has been rephrased for originality. Images are credited to the original source.