Advertisers To IAB: Ad Growth Decelerating This Year

The adoption of generative AI throughout the advertising industry has grown in the past six months, but Internet Advertising Bureau data released today suggests GAI in media planning has surged, with eight in 10 buyers saying they already use -- at 36% and 42%, respectively -- the technology for media planning and/or activation.

Safeguards remain top of mind, with half of users insisting on some sort of mandatory human oversight and clear brand-safety protocols to protect against misuse, inaccuracies, and other risks.

The insights come from the latest study published by the Internet Advertising Bureau (IAB) Thursday just ahead of the IAB ALM conference in Palm Springs, California at the end of this month.

Findings from the study estimate advertisers will spend less on media in 2025 compared with last year, attributing the decline to a lack of major events in which to attach ad buys such as the Olympics and the Presidential election.

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For example, the percentage of paid search ad spend is estimated to fall from 13.1% in 2024 to 8.5% in 2025. The projected share of spend will go from 12.3% in 2024 to reach 15.6% this year.

IAB forecasts overall ad spend will grow 7.3% in 2025, much slower than the but will be slower than the 11.8% in 2024. With many companies launching their own retail or ad media network this past year, retail media is projected to grow 15.6%. Connected television (CTV) is forecast to grow by 13.8%, and social media by 11.9%.

The study, titled 2025 Outlook: A Snapshot into Ad Spend, Opportunities, and Strategies for Growth, offers a look into projected ad-spend trends for this year based on a survey of buyers at brands and agencies. It aims to understand strategies, anticipated spending by channel, and the challenges they foresee.

Media buyers’ goals, as in previous years, span the entire purchase funnel, but this year customer acquisition remains the top priority, increasing 12% year-over-year.

An increasingly fragmented ad ecosystem, combined with the loss of signals to target ads and an increase of walled gardens have advertisers revisiting marketing-mix models (MMM) along with tactics to improve reach and frequency.

There also are concerns about deduplication, incrementality, and measurement remain -- particularly in video streaming where the growth buyers are excited about also fuels their top concern, cross-platform measurement.

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