New Insights from IAB: Ad Spend Growth Despite Challenges Ahead

News Summary

The Interactive Advertising Bureau (IAB) has released its latest report predicting a 7.3% growth in ad spending for 2025. Highlights include a significant rise in retail media advertising, projected at 15.6%, alongside growth in connected TV and social media ads. Marketers are focusing on customer acquisition amid challenges in measurement and the rise of AI in media planning, reflecting a need for transparency and ongoing investment in advertising.

New Insights from IAB: Ad Spend Growth Despite Challenges Ahead

Exciting news is in the air for advertisers and marketers! The Interactive Advertising Bureau (IAB) just dropped its latest report, titled “2025 Outlook: A Snapshot into Ad Spend, Opportunities, and Strategies for Growth”, on January 16, 2025. This report, based on a detailed survey of buyers at brands and agencies, highlights what we can expect in the world of advertising spending over the next year.

What’s on the Horizon?

So, what does the future hold in terms of ad spending? According to the report, we’re looking at an overall growth rate of 7.3% in ad spend for 2025. While this number may seem modest, it’s important to remember that last year was a standout year due to major events like the Olympics and the presidential election. The excitement of those events spurred much higher growth rates in 2024, making this year’s forecast appear a little lower in comparison.

Retail Media Takes the Lead

A particularly interesting point is the anticipated growth of retail media, which is projected to soar by more than twice the overall rate, at an impressive 15.6%. This suggests that brands are increasingly tapping into retail channels to connect with customers directly where they shop, making it a hot area for future investment.

Connected TV and Social Media Growth

Looking at other specific categories, Connected TV (CTV) is expected to grow by 13.8%, while social media ad spending will likely increase by 11.9%. It’s clear that marketers see great opportunities in these platforms as they continue to evolve and attract audiences.

Focusing on Customer Acquisition

When it comes to priorities, buyers are heavily leaning towards customer acquisition. In fact, there’s been a 12% year-over-year increase in this focus, driven by the need for revenue growth amidst rising costs and tighter profit margins. Advertisers are keenly aware that winning new customers is essential to maintaining a healthy bottom line in today’s economy.

Challenges in Measurement and Insights

However, it’s not all smooth sailing. The report points to ongoing challenges within the fragmented advertising ecosystem; buyers are facing issues with signal loss and walled gardens that make it trickier to track effectiveness. As a result, many are reassessing their marketing mix models (MMM) to better understand how to allocate their budgets.

One of the biggest challenges still left to tackle is cross-platform measurement in video streaming, which remains a thorn in the side for many marketers looking to get an accurate read on their campaigns.

The AI Factor in Advertising

The rise of artificial intelligence in media planning is noteworthy, with 80% of surveyed buyers either currently using or exploring generative AI for their media strategies. This indicates a significant shift in how brands are approaching their advertising, with a strong interest in leveraging technology to enhance effectiveness. Notably, half of those using generative AI emphasize the importance of having human oversight and strict brand safety protocols in place.

Interestingly, only a third of companies utilizing generative AI have organized resources to encourage teamwork and collaboration within their organizations. This suggests that while the interest is high, there may still be some hurdles to overcome for companies to maximize the technology’s potential.

Moving Forward

The CEO of IAB, David Cohen, has echoed sentiments about the need for transparency, choice, and achieving effective results to keep buyers optimistic in this evolving landscape. The full findings of the 2025 Outlook report are available through IAB for those who want to dive deeper into these insights.

Overall, while 2025 may present some challenges, the ongoing investment in advertising—as well as the burgeoning role of digital platforms and AI—signals a vibrant future ahead for the advertising industry.

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Additional Resources

• IAB Report on Digital Advertising Growth
• Wikipedia: Advertising
• Statista: New York Times Ad Expense
• Google Search: Digital Advertising 2025
• AdImpact Blog on NY CD 16 Primary
• Google Scholar: Digital Advertising Growth
• TVTechnology: IAB Survey on Ad Growth and AI
• Encyclopedia Britannica: Advertising
• NY1: Record Breaking Ad Spending in NY 16 Primary
• Google News: 2024 Election Ad Spending