• by Laurie Sullivan  @lauriesullivan, April 17, 2025

Digital advertising revenue grew nearly 15% to $259 billion in 2024, according to the Interactive Advertising Bureau (IAB), which released its annual internet advertising revenue report on Thursday.

The report -- commissioned by the IAB and conducted by PwC Advisory Services -- reveals that 2024 ended on a high note, higher than many had initially anticipated.

Quarterly ad-revenue growth improved throughout 2024, from the highest growth rate of 15.7% in Q1 to 14.3% YoY growth in Q4. This points to continued reliance on emerging technology that automates all types of processes to fuel growth.

Emerging versions of artificial intelligence (AI) became a catalyst for that growth. The IAB called it "a transformative force."

This shift -- while disrupting the status quo -- has already begun to change the ecosystem. The report makes note that “AI is not just automating advertising -- it’s reshaping the entire media business model,” from ad targeting to forecasting, privacy and signal loss, and creative to media buying.

AI moved from buzzword to business driver, according to the IAB, and mid-tier companies took advantage of the lift. The top 11 to 25 publishers saw the fastest growth in 2024, gaining 3.1% in market share as brands increasingly shifted ad budgets beyond the largest platforms toward emerging digital players.

Digital video overall became the fastest-growing format after slower growth in 2023. Revenue rose 19.2% year-over-year (YoY) to $62.1 billion. It now accounts for 24% of total ad revenue.

Video accounted for 24% of total ad revenue, but search advertising remained the industry’s largest segment, reaching $102.9 billion. Search saw a $14.1 billion increase in revenue, growing 15.9% YoY. It maintained its dominant 39.8% market share.

Search continues to command the largest market share at 39.8%. The IAB notes a continued investment in performance-driven, intent-based advertising as brands prioritize visibility in AI-powered search models and evolving consumer discovery behaviors.

Display advertising revenue rebounded from 4% growth in 2023 to 12.4% in 2024, reaching $74.3 billion.

Podcast advertising revenue grew 26.4% YoY, up from 5.5% last year.

Shifting consumer media habits fueled growth. Changes included cord-cutting, which drove greater engagement with on-demand audio, and podcasts emerging as a key platform for political advertisers seeking to connect with voters ahead of the election.

Programmatic ad revenue grew 18%, reaching $134.8 billion YoY.

Social media advertising revenue rose $23.8 billion in 2023 -- up to $88.7 billion in 2024.

The report suggests that advertiser confidence in social platforms rose partly due to election spend and the popularity of commerce and social.

Ecosystems are evolving at a rapid clip. Retail media network advertising revenue within commerce rose 23% YoY to $53.7 billion last year.

The IAB suggests that the $10.1 billion increase reinforces the growing importance of first-party data and closed loop reporting, as brands shift to privacy compliant audience targeting.

AI has begun to disrupt core advertising channels -- particularly search, where models like Google’s Search Generative Experience and AI Mode as well as companies like Microsoft, Perplexity, and OpenAI shift consumer expectations toward conversational, answer-based experiences rather than static text ads.

Search-engine results provide page rankings where brands bid for placement in a list of links, AI-powered search models blend sponsored content into organic responses and create a native, non-disruptive ad format.

These models move away from traditional keyword-based bidding and toward sponsored content embedded directly into AI-generated results, fundamentally changing how brands show up and compete, the report emphasized.

The future of advertising resides in ecosystems that converge content, commerce, and customer data, driven by intelligent systems.

“Brands that activate against this model -- leveraging AI to align audience attention with shoppable moments and outcome-driven measurement -- will be best positioned to lead in a performance-focused, privacy-aware, and increasingly fragmented digital marketplace,” per the report.