IAB expects digital advertising growth to slow considerably this year

U.S. digital advertising will see a 7.3% increase over last year’s spend, according to the latest IAB forecast. This growth is notably lower than the 11.8% 2024 projection.

Retail media networks (up 15.6% year-over-year) CTV (+13.8%) and social media (+11.9%) all expect double-digit growth, according to the study, “2025 Outlook: A Snapshot into Ad Spend, Opportunities and Strategies for Growth.”

Slowdown. The study indicated that 2024 accelerated on ad-heavy events like the Paris Olympics and national and state elections.

This year, advertisers will be more selective, focusing on emerging high-growth channels like RMNs and CTV.

“This report clearly shows that budgets are being focused at points where consumers, commerce and video converge — where advertisers can leverage the power of sight, sound, and motion and consumers can engage and transact,” said IAB CEO David Cohen in a release.

Growth by channel. Indeed, the highest-growth channels in the 2025 projections deliver video and full-funnel opportunities from branding to commerce.

Dig deeper: Social media and influencers: 2025 predictions

Here is a breakdown of growth by channel.

Dig deeper: Retail media networks continue to grow: 2025 predictions

Priorities for advertisers. Performance-driven media and 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 critical to their plans. Coming in second, measurement and attribution was critical to 50% of marketers.

Brand advertising came in third at 45%, down from 57% in a previous study conducted in summer 2024. (The most recent study asked marketers these same questions in November, 2024.)

GenAI-powered media planning. Marketers are adopting genAI tools to help with media planning, the IAB study found. A full 42% are currently using this technology for media planning and/or activation. Another 36% are exploring the technology.

Mediaocean found genAI 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 research (38%).
• Copywriting (32%).
• Image generation (22%).
• Customer service (14%).

Why we care. It’s understandable expectations would be lower following a boom year in 2024. Due to immense competition, marketers are pursuing digital ad channels at the cutting edge of consumer engagement. As a result, traditional media like linear TV will see lower, or negative, growth — although they remain an important part of a full media plan moving forward.

More about the IAB study can be found here. (Membership required to access the full report.)