IAB expects digital advertising growth to slow significantly this year
Digital advertising in the United States will see a 7.3% increase over last year’s spending, according to the latest IAB forecast. This growth is significantly lower than the projection of 11.8% for 2024.
Retail media networks (up 15.6% year over year), CTV (+13.8%) and social media (+11.9%) all expect growth double digits, according to the study “Outlook 2025: an overview of advertising spending, growth opportunities and strategies.
To slow down. The study indicated that 2024 was accelerated by advertising-intensive events like the Paris Olympics and national and state elections.
This year, advertisers will be more selective and focus on emerging, high-growth channels like RMN and CTV.
“This report clearly shows that budgets are focused on the intersections of consumer, commerce and video – where advertisers can harness the power of sight, sound and motion and where consumers can engage and transact,” David Cohen, CEO of IAB, said in a statement.
Growth by channel. Indeed, the fastest growing channels in the 2025 projections offer video and comprehensive opportunities, from branding to commerce.
Dig Deeper: Social media and influencers: 2025 forecasts
Here is a breakdown of growth by channel.
Image: IAB, Outlook 2025: An overview of advertising spending, opportunities and growth strategies.
Dig Deeper: Retail Media Networks Continue to Grow: Forecast for 2025
Priorities for advertisers. Performance-driven media, along with measurement and attribution capabilities, are top priorities for advertisers, according to Mediaocean’s 2025 Advertising Outlook report.
Sixty-two percent of marketers said performance-driven paid media was most essential to their plans. In second place, measurement and attribution were essential for 50% of marketers.
Brand advertising comes in third at 45%, up from 57% in a previous study conducted in summer 2024. (The most recent study asked marketers these same questions in November 2024.)
Media planning based on GenAI. Marketers are adopting genAI tools to aid media planning, according to IAB research. 42% of them currently use this technology for media planning and/or activation. 36% are exploring this technology.
Mediaocean found that genAI was the most important trend marketers are watching in 2025. Here are the top ways marketers in the study are using genAI:
Data analysis (47%). Market studies (38%). Writing (32%). Image generation (22%). Customer service (14%).
Why we care. It’s understandable that expectations are lower after a boom year in 2024. Due to immense competition, marketers are looking for digital advertising channels that are at the forefront of consumer engagement. As a result, traditional media like linear TV will experience lower or even negative growth, although they will remain an important part of a comprehensive media plan going forward.
To learn more about the IAB study, click here here. (Membership required to access the full report.)
