The Rise of Digital Video Ad Spend in 2025
Why Brands Are Doubling Down on Video—and How to Make It Work for You
In 2025, one thing is clear: video isn’t just part of the marketing strategy anymore. It is the strategy.
According to the Interactive Advertising Bureau (IAB), digital video advertising is projected to grow by 14% this year. That’s not a blip—it’s a definitive shift in how brands are prioritizing their resources. From short-form content on TikTok to long-form brand storytelling on YouTube and CTV (connected TV), video is dominating digital attention—and commanding serious budgets.
But it’s not just about pouring more money into production. It’s about understanding the evolving habits of audiences, the complexity of the platforms, and the creative formats that convert.
This article is your deep dive into the current state and future potential of digital video ad spend: what’s driving it, where it’s going, and how your brand can ride the wave intelligently.
Why Video? Why Now?
Several powerful forces are colliding to accelerate the video boom:
Screen-first culture: We live in a scroll-and-stream society. From Gen Z to Boomers, people are spending more time watching than reading.
Platform evolution: Video isn’t just for YouTube anymore. Instagram Reels, TikTok, LinkedIn, X (formerly Twitter), and even Amazon are investing heavily in video-first experiences.
Algorithmic preference: Video content is favored by most social media and search platforms, giving it greater organic reach and higher engagement rates.
Consumer behavior: Users retain 95% of a message when they watch it in a video versus 10% when reading it. Video sells better. Period.
The result? Brands are responding with larger investments in video not only for awareness, but for education, conversion, and retention.
Where the Money’s Going
So, where exactly is that 14% growth being directed? Here’s a breakdown of where marketers are focusing their video ad dollars in 2025:
1. Short-Form Vertical Video
TikTok, Instagram Reels, YouTube Shorts, Snapchat Spotlight
Bite-sized, entertaining, mobile-first
Perfect for brand awareness and product sampling
2. Connected TV (CTV)
Ads on platforms like Hulu, Roku, Amazon Freevee, and YouTube TV
Combines the reach of traditional television with the targeting power of digital
Highly effective for storytelling and broad campaigns
3. Interactive and Shoppable Video
Clickable overlays, QR codes, in-video purchase links
Especially popular in fashion, beauty, home goods, and tech
Bridges the gap between discovery and conversion
4. Live Video and Streaming Partnerships
Collaborations with influencers or creators on platforms like Twitch, YouTube Live, TikTok Live
Builds authenticity and community
Offers real-time engagement and purchase triggers
5. B2B Video Content
Thought leadership, product explainers, demo videos
Hosted on LinkedIn, company blogs, and YouTube
Increasingly vital for high-consideration purchases
What’s New in 2025?
The video landscape is not static. Here’s what’s new or intensifying this year:
AI-Generated Video Content: Tools like Runway, Synthesia, and Pika are making it easier for brands to scale video content without massive production teams.
Zero-Party Data Targeting: Brands are using opt-in user data to deliver hyper-personalized video ads that feel native and relevant.
Performance-Driven Creative: A/B testing in real-time, dynamic creative optimization (DCO), and data-backed storytelling are standard now, not optional.
Audio-On Viewing: With more people watching with sound on (especially on CTV), brands are investing more in sound design, voiceover quality, and licensed music.
Challenges Brands Need to Overcome
More money doesn’t guarantee better results. Here’s what can go wrong:
Creative fatigue: If your ad looks like everyone else’s, it won’t matter how much you spend.
Overproduction: Big budgets often lead to slick but forgettable videos. Audiences respond more to authenticity than gloss.
Poor targeting: Even a brilliant video will flop if shown to the wrong audience.
Ignoring accessibility: Captions, contrast, pacing—your video must be accessible to truly perform at scale.
How to Win with Video in 2025
Let’s get practical. Here are some high-impact strategies that marketers, creators, and brands are using to maximize returns on video investment this year:
Prioritize storytelling over selling: Make the viewer feel something. Inform. Entertain. Then sell.
Design for mobile-first: Most videos are viewed vertically, on phones, in noisy environments.
Nail the first 3 seconds: Hook fast or lose them forever.
Use faces and real people: UGC-style content still outperforms brand-polished clips.
Experiment with length: Not every video has to be 15 seconds. Some stories need 3 minutes. Test and learn.
Track the right KPIs: Views are vanity. Watch time, click-through, conversion, and retention are what matter.
Sectors Leading the Charge
Certain industries are outpacing others in video ad spend and innovation:
Retail and e-commerce: Product try-ons, influencer hauls, live shopping
Tech and SaaS: Demos, case studies, onboarding walkthroughs
Health and wellness: Educational videos, testimonials, mental health explainers
Travel and lifestyle: Experience-first storytelling, immersive visuals
If your brand touches one of these sectors, video should already be central to your marketing mix.
Final Thoughts: Don’t Just Spend More—Spend Smarter
The rise in digital video ad spend isn’t about chasing a trend. It’s a reflection of how people consume, engage, and decide. Brands that treat video as a box to check will fall behind. Brands that treat it as a core storytelling tool, optimized by data and powered by creativity, will thrive.
It’s 2025. The camera is always on. Is your brand ready?