Digital ad revenue nears $300B, report

The Interactive Advertising Bureau (IAB) has reported that internet advertising revenue reached $294.6 billion in 2025, marking a 13.9 percent year-on-year increase and setting a new industry benchmark.

The findings are published in the 2025 Internet Advertising Revenue Report, conducted by PwC, which has tracked digital advertising performance for 30 years.

Growth driven by performance and platform consolidation

Despite broader economic and geopolitical uncertainty, the digital advertising market continued to expand, even without major cyclical events such as the Olympics, FIFA World Cup or elections that typically boost spending.

David Cohen, chief executive officer, IAB: "This revenue growth reflects a market that has reoriented around performance channels. As expectations for measurable outcomes rise, investment is concentrating in areas that can directly correlate spend to business results. At the same time, artificial intelligence is rapidly moving from theory into practice, emerging as a meaningful driver of efficiency and effectiveness across the ecosystem."

Video formats, including connected TV, social video, online video and short-form content, generated $78 billion in revenue, growing 25.4 percent year on year. Social media advertising rose 32.6 percent to $117.7 billion, driven by the expansion of the creator economy and improved targeting and attribution tools.

Programmatic advertising increased 20.5 percent to $162.4 billion, while commerce media grew 18 percent to $63.4 billion, reflecting continued investment in data-driven and automated buying systems.

Shifting consumer behaviour reshapes media investment

The report highlights ongoing shifts in consumer behaviour towards video content, creator-led ecosystems and performance-focused environments, which are influencing where advertising budgets are allocated.

Search advertising, including AI-assisted search, remained the largest revenue category at $114.2 billion, growing 11 percent year on year, although its growth rate slowed compared to 2024.

Jack Koch, senior vice president of research and insights, IAB: "While overall revenue is stronger than ever, consumer usage patterns have changed materially over the last year. The ability to integrate data, media, and commerce is becoming a defining advantage: companies that can provide seamless, personalized, and commerce-enabled experiences are where the attention and investment are moving."

AI, creators and streaming redefine market outlook

The report identifies three structural shifts shaping the next phase of digital advertising: artificial intelligence, creator-led media and streaming video.

AI is increasingly embedded across advertising workflows, from creative production to media buying and commerce integration, with growing interest in automated and agent-based systems.

Creator advertising reached $37 billion in 2025 and is projected to rise to $44 billion in 2026, as brands adopt longer-term partnerships and integrate creators into broader marketing strategies.

Streaming video continues to evolve as a performance-driven channel, with platforms investing in live sports rights and ad-supported tiers to increase inventory and engagement.

Building standards for future growth

IAB emphasised the importance of measurement standards and interoperability as the sector adapts to rapid technological change. The organisation is advancing initiatives such as Project Eidos, alongside technical frameworks including Agentic Advertising Management Protocols developed by IAB Tech Lab.

David Cohen: "The lesson of our 30-year history is that measurement, standards, and interoperability — as mundane as those things can sometimes sound — are what got this industry from zero to just shy of $300 billion. And with the disruption and opportunity that AI is bringing into the ecosystem, there is still lots of vital work ahead."

The full report can accessed here

www.iab.com

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