Advertising professionals utilizing insights from the IAB 2025 study to enhance ad strategies.
The IAB’s 2025 Outlook study projects a 7.3% growth in ad spending, highlighting a significant rise in retail media at 15.6%. While challenges in measurement persist, the integration of generative AI is transforming media planning. Brands are prioritizing customer acquisition, reflecting a cautious optimism in the advertising landscape as they navigate economic hurdles.
On January 16, 2025, the Interactive Advertising Bureau (IAB) unveiled its latest study titled “2025 Outlook: A Snapshot into Ad Spend, Opportunities, and Strategies for Growth.” This annual report takes a deep dive into what we can expect in the advertising world over the coming year, especially as we navigate a landscape filled with both opportunities and challenges.
The study forecasts an overall ad spend growth of 7.3% for 2025. While this might seem modest compared to the robust growth we witnessed in 2024—mainly driven by big events like the Olympics and the presidential election—it still represents a steady upward trend amidst ongoing economic challenges. If you think about it, even small improvements can add up, especially in such a dynamic industry.
A standout highlight from this year’s study is the anticipated growth in retail media. This segment is expected to soar at a remarkable rate of 15.6%, which is more than double the overall ad spending growth. It’s clear that brands are harnessing the power of retail platforms to engage consumers directly, tapping into the shopping experience where many of us are already spending our time.
Connected TV (CTV) is another area that’s expected to flourish, with a growth rate of 13.8%. We’ve all seen how TV viewing habits have shifted, especially with more people streaming shows and movies online. This opens up a treasure trove of opportunities for advertisers aiming to reach audiences in relevant, entertaining ways.
Meanwhile, social media ad spending is also set to increase by 11.9%, a trend not surprising given how much time people spend on these platforms. With social media remaining a pivotal touchpoint for brands, the push for innovative content is more important than ever.
Interestingly, the survey revealed that buyers are prioritizing customer acquisition, which has seen a surge of 12% year-over-year. With inflation and dwindling profit margins taking a toll on businesses, brands are keenly focusing on strategies that attract new customers. It’s all about finding effective ways to grow revenue in these uncertain times.
However, not all is smooth sailing in the advertising waters. The study also highlighted some ongoing challenges, particularly in the fragmented ad ecosystem. Measurement hurdles, especially in cross-platform video streaming, remain a major concern for many buyers. It’s a significant headache that needs to be sorted out to maximize the effectiveness of advertising campaigns.
One of the key trends we can’t ignore is the integration of generative AI in advertising. A whopping 80% of surveyed buyers are either currently using (42%) or exploring (36%) this technology for media planning and activation. This indicates a massive shift toward leveraging AI solutions to streamline processes and improve efficiency. However, the need for human oversight is crucial, with half of the users insisting on mandatory checks and stringent brand safety protocols.
Moreover, only about one-third of the companies that dabble in generative AI have established structured resources for collaborative efforts within their teams. The need for teamwork cannot be overstated in this rapidly evolving digital environment.
IAB CEO, David Cohen, emphasized the importance of transparency, choice, and effective business results in maintaining optimism among buyers. In an industry where trust can be hard to come by, these pillars become essential in navigating future challenges.
Overall, the “2025 Outlook” study paints a picture of cautious optimism in the advertising realm, showcasing promising growth areas while highlighting the issues that need addressing. For anyone keen on the latest trends in advertising, the full findings of this insightful study are available through IAB’s official channels.
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