Dive Brief:

• A majority of ad buyers are currently using generative artificial intelligence (AI) for digital video creation, according to data from the Interactive Advertising Bureau (IAB). Thirty percent of digital video ads are built from scratch or enhanced using the technology, with that number expected to grow to 39% in 2026.
• Smaller and mid-tier brands are adopting the technology at a higher rate. By 2026, smaller brands expect 45% of their digital video to be developed using generative AI and 42% of midsize brands expect the same. Larger brands only expect 36% of their digital video to be built using the technology by the same year.
• Part two of the IAB’s “2025 Digital Video Ad Spend & Strategy Report” reiterates the findings of part one while expanding on the growing role generative AI is playing in digital video, along with the increased utilization of connected TV (CTV).

Dive Insight:

Generative AI continues to become a more important tool for marketers, particularly smaller and midsize firms, according to part two of IAB’s report on digital video ad spend, which was conducted in partnership with Advertiser Perceptions and Guideline.

Notably, generative AI is being used to create multiple versions of the same advertisement. Among respondents who are using or planning to use generative AI, 42% aim to create different versions of the same video for different audiences. Visual and style changes (38%) and refining contextual relevance (36%) were some of the other top use cases cited.

The report also heavily explored CTV’s place in the digital video ecosystem, especially as the channel comes to rival social video as a “must buy” for marketers. Buyers expect 47% of CTV inventory to be biddable this year, up from 34% in 2024. When buying CTV programmatically, 41% of buyers believe it will drive better return on investment and ad spend and 35% expect it to be easier to achieve scale. Programmatic transactions make up about 85% of CTV buys, a 10 percentage-point jump from last year, according to the report.

“Being available programmatically is table stakes. Being a strategic partner who delivers ideas and results is becoming what’s vital to win ad spend,” said Jamie Finstein, vice president of Media Center at the IAB, in a statement.

There are still a number of challenges when it comes to CTV. Small spenders tend to experience issues at a higher rate compared to mid-tier and large spenders. For example, 38% of small spenders encounter measurement issues versus 27% of mid-tier spenders and 31% of large spenders who say the same. A focus on bottom-funnel metrics and a lack of resources can compound issues for smaller brands, per the IAB.

Additionally, CTV is changing the relationship between media buyers and sellers. Eighty-three percent of buyers say human involvement is necessary to customize CTV deals and 74% indicate they plan on investing in in-house resources to manage self-service CTV platforms.