Like it or not, GenAI is coming to digital video ad creation.
Almost 9 in 10 digital video buyers are using or plan to use gen AI to aid in the creation of digital video ads, according to a new report from the Interactive Advertising Bureau (IAB). According to the report, which is based on a survey of 368 advertisers fielded between February 17 and March 7, around 30% of digital video ads will be made with or enhanced by GenAI tools this year, up eight percentage points from 2024; that number is expected to grow to 39% next year.
Small- and mid-tier brands are expected to adapt the tech quicker than larger companies, according to the IAB: “Small spenders,” which the report defines as companies spending less than $10 million annually, expect 45% of their ads to be created with GenAI by 2026, while 36% of “large spenders” (those who spend $50+ million annually) said the same.
Of the respondents who said they were using or planned to use GenAI to create multiple versions of ads, the largest share (42%) said they were doing so to create “versions for different audiences,” while a slightly smaller percentage (38%) said they were using the tech to make “visual and style changes.”
The responses “suggest that the other GenAI capabilities become more valuable when buyers have already solved for reaching the right audience first,” the report read.
The effects on digital video could be considerable. Overall, digital video (defined in the report as CTV, social video, and online video) is expected to make up 58% of total TV and video ad spend in 2025, according to the report. In 2025, digital video spend is expected to grow 14% to $72 billion, while CTV spend is expected to grow 13% to $26.6 billion.
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Pulled in: As advertisers continue to spend on digital video, content quality (43%) and targeting capabilities (39%) ranked as the top two most important criteria when deciding where exactly to put that spend. Targeting capabilities were important to 56% of small spenders, while only 39% of mid-tier and 35% of large brands said the same.
Advertisers of all kinds are looking for more options in the CTV video space, the IAB found, and more than half of buyers reported seeking out more capabilities and options when advertising against live programming on streaming compared to on linear TV, according to the report.
“Although streaming is still an emerging channel for live content...buyers are holding their streaming partners to a higher standard than linear TV,” the report read.
Brand safety and incremental audiences polled highest in terms of expectations buyers have when looking to spend on live content on both streaming platforms and linear TV.
Excluding insertion order transactions, 75% of CTV buys were done programmatically in 2024. This year, that number is projected to grow to 85%.
The whole nine yards: When it comes to reasons to buy digital video ads, buyers surveyed were most interested in achieving bottom-funnel outcomes such as store visits (both online and off) and sales (both clocked in at 44%). In terms of measurement preference, 55% said campaign and placement-level KPIs were most important, while 47% said “basic data regarding the adjacent content” was crucial.
But measurement continues to pose some challenges, especially among small spenders: 38% said that “measurement complexity” presents a challenge to activating in digital video programmatically, while “standardization issues” and “leveraging cross-channel data” both were a concern for 36% of small spenders.