• by Laurie Sullivan , Yesterday

Social-media advertising revenue hit $117.7 billion last year -- up 32.6% year-over-year (YoY), topping media gains, according to the Interactive Advertising Bureau (IAB).

It accounted for 40% of total advertising revenue in 2025, primarily due to growth in the creator economy, enhanced commerce integration, and ongoing advancements in targeting, measurement, and attribution capabilities.

Creator advertising has become a core media channel with advertising spend reaching $37 billion in 2025. It is growing faster than the broader advertising market, with spending projected to reach $44 billion in 2026, according to the IAB.

The 2025 Internet Advertising Revenue Report conducted by PwC released Thursday shows despite concerns about economic and geopolitical uncertainty, the industry drove record revenue, reaching $294.6 billion in 2025, up 13.9% YoY.

“This revenue growth reflects a market that has reoriented around performance channels. As expectations for measurable outcomes rise, investment is concentrating in areas that can directly correlate spend to business results,” said David Cohen, CEO, IAB. “At the same time, artificial intelligence is rapidly moving from theory into practice, emerging as a meaningful driver of efficiency and effectiveness across the ecosystem.”

The IAB reported that gains were “notable,” given that 2025 lacked major cyclical events such as the Olympics, FIFA World Cup, or elections, which historically drive increased ad spending across the digital ecosystem.

In terms of dollars generated, search followed social media with ad revenue rising 11% to $114.2 billion, taking a total of 38.8% of the media spend.

Display ad revenue rose 9.8% to $81.6 billion, taking 27.7% of media spend.

Digital video ad revenue rose up 25.4% YoY to $78 billion, up 25.4% YoY, taking 26.5% of media spend.

Commerce media ad revenue rose 18% YoY to $63.4 billion, taking 21.5% of media spend. The increase reinforced this media’s role as a core performance channel powered by first-party data.

Podcasts ad revenue rose 17.6% to $2.9 billion, taking 1% of media spend.

Consumer use patterns shifted toward video such as connected TV (CTV), social video, online video, and short-form video.

This sector grew 25.4% YoY, to a total of $78 billion in revenue. Compared to a year ago, 19.2%, this shows that video still captures a growing share of incremental digital advertising revenue relative to other formats.

Programmatic advertising rose 20.5% YoY to $162.4 billion, gaining $27.6 billion in new spend as automated buying scales and lays the groundwork for agentic AI-driven media buying.