Over eighty-five percent of advertisers plan to employ Generative Artificial Intelligence for creating video advertisements, predicts the Interactive Advertising Bureau (IAB)
The landscape of video advertising is undergoing a significant transformation, with Generative AI (GenAI) emerging as a key player in the production of digital video ads. According to the IAB's "2025 Digital Video Ad Spend & Strategy Full Report," released on July 15 during the IAB Media Center's Video Leadership Summit, 86% of advertisers are already using or planning to use GenAI for video ad creative [1][3].
Mainstream Adoption and Democratisation
Half of advertisers are currently employing GenAI for video ad creation, signalling a rapid mainstream adoption as production costs plummet and accessibility increases [1][3]. This shift is particularly impactful for small and mid-tier brands (SMBs), who can now create high-quality digital video ads quickly, affordably, and at scale—capabilities once limited to large brands with substantial resources [1][3].
Market Projections
Buyers project that GenAI-created ads will account for 40% of all ads by 2026, with SMBs adopting the technology faster than the largest brands [1][3]. This democratisation of advertising is accelerating, as barriers to entry are lowered, and a broader range of advertisers can compete effectively in the digital video space [1][3].
Future Outlook for Small and Mid-Tier Brands
Leveling the Playing Field
GenAI enables SMBs to bypass the need for large creative teams or expensive production pipelines, allowing them to develop, test, and scale campaigns with unprecedented speed and efficiency [1][3]. This levels the competitive landscape, empowering smaller players to produce creative that rivals that of larger competitors.
Focus on Business Outcomes
Advertisers are increasingly prioritising measurable business outcomes—such as store visits and sales—over traditional metrics like impressions or views [3]. GenAI supports this shift by enabling rapid iteration and optimisation based on performance data, making it easier for SMBs to align ad creative with tangible results.
Advertiser Expectations for CTV and Live Sports
Biddable Inventory
There is growing demand for biddable inventory in Connected TV (CTV) and live sports environments [3]. Advertisers expect more programmatic, real-time buying opportunities that allow them to reach targeted audiences during premium, high-engagement content.
Interactive Experiences
Advertisers are looking for more interactive and immersive ad experiences within CTV and live sports, moving beyond static placements to engage viewers directly [1]. This includes shoppable ads, real-time polls, and integrated e-commerce features that drive immediate action.
Measurement and Attribution
As the industry faces the ongoing deprecation of third-party cookies and heightened privacy concerns, there is a push for new, AI-driven measurement solutions that can accurately attribute outcomes without relying solely on digital IDs [2][4]. Platforms like WPP Media’s "Open Intelligence" are emerging to address this need, leveraging vast, decentralised data networks to provide actionable insights beyond traditional tracking [2][4].
Key Trends and Expectations
| Aspect | Current State | Future Outlook | SMB Impact | |-----------------------------|--------------------------------------------|-------------------------------------------------|-----------------------------------| | GenAI Adoption | 86% using/planning to use; 50% already do | 40% of all ads by 2026; SMBs adopt faster | Levels playing field | | CTV/Live Sports | Growing biddable inventory demand | More interactive, shoppable experiences | Access to premium audiences | | Measurement | Shift from impressions to outcomes | AI-driven, privacy-compliant attribution | Better ROI tracking | | Production Cost | Falling rapidly | Further democratisation expected | Affordable, scalable creation |
Conclusion
GenAI is transforming video ad creation by making it faster, cheaper, and more accessible—especially for small and mid-tier brands [1][3]. The future will see even broader adoption, with a focus on measurable outcomes, interactive CTV and live sports experiences, and advanced, privacy-friendly measurement powered by AI [1][2][3]. As these trends accelerate, SMBs are positioned to compete more effectively in a market once dominated by large players.
- The report indicates that buyers expect 47% of CTV inventory to be biddable, up from 34% last year, and three out of four (74%) are planning to build internal teams to manage self-serve CTV activation in-house.
- David Cohen, CEO of IAB, states that the economics of advertising are being transformed due to the falling costs of production and the increasing opportunities for advertisers.
- Advertisers are using GenAI creative enhancement capabilities to create versions for different audiences, visual style changes, and contextual relevance.
- Generative AI is rapidly becoming a cornerstone of video ad creation, transforming how campaigns are developed, tested, and scaled.
- Failure to deliver business outcomes is the top reason digital video buyers reduce or remove spend with streaming partners, according to the report.
- SMBs are using Generative AI to create high-quality digital video ads quickly, affordably, and at scale without the need for large teams or expensive production capabilities.
- Advertisers are struggling with measurement complexity, standardisation, cross-channel data, and scalability, especially as digital video democratises advertising for small and mid-sized businesses.
- The report, created in partnership with Advertiser Perceptions and Guideline, provides insights into the impact of Generative AI on ad production, ad buyers' demands for CTV and live sports, and the focus on business outcomes.
- Buyers expect new and better capabilities than they can get in linear TV for sports and other live content coming to streaming platforms.
- The rapid mainstream adoption of Generative AI (GenAI) in digital video ad production is evident as half of advertisers are already employing it for video ad creation.
- SMBs are taking advantage of GenAI-produced ads to create high-quality video content quickly, affordably, and at scale, capabilities typically limited to large brands with substantial resources.
- In the future, GenAI-created ads are projected to account for 40% of all ads by 2026, with smaller brands adopting the technology faster than the largest brands.
- Advertisers are increasingly focusing on measurable business outcomes, and GenAI supports this shift by enabling rapid iteration and optimization based on performance data.
- The demand for biddable inventory and more interactive, shoppable experiences in Connected TV (CTV) and live sports environments is growing, as is the need for new, AI-driven measurement solutions that can accurately attribute outcomes without relying solely on digital IDs.
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