Generative AI is rapidly becoming a cornerstone of video advertising, transforming how campaigns are conceived, executed, and scaled. According to the Interactive Advertising Bureau’s (IAB) 2025 “Video Ad Spend & Strategy” report, 86% of ad buyers are either already using or planning to adopt generative AI to create video ad content.

The report reveals that nearly 90% of advertisers intend to use GenAI to develop video ads, with 42% leveraging its creative enhancement capabilities to tailor versions for specific audiences. Other key use cases include altering visual styles (38%) and improving contextual relevance (36%).

The research underscores how GenAI and programmatic buying are revolutionizing the production, distribution, and measurement of video advertising. This evolution is especially timely as advertisers face increasing pressure to deliver measurable returns on investment.

Small and medium-sized businesses (SMBs) are reportedly at the forefront of this shift. These companies are adopting GenAI to create high-quality digital video ads efficiently and affordably, eliminating the traditional need for large creative teams or expensive production setups previously accessible only to major brands.

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In 2025, AI is expected to generate 30% of digital video ads. By 2026, this figure is projected to rise to 40%, with SMBs leading adoption ahead of larger companies.

David Cohen, CEO of the IAB, commented: “The economics of advertising are being transformed. As the costs of production fall, the opportunities for advertisers multiply.”

Cohen added, “Marketers are increasingly looking for partners that not only provide access to GenAI solutions but also help them unlock its full strategic and creative potential.”

The report also points to major growth in programmatic advertising, particularly on streaming platforms. Buyers estimate that 47% of connected TV (CTV) inventory will become biddable in 2025, up from 34% the previous year.

Moreover, 74% of buyers say they are building or planning in-house teams to manage self-serve CTV activation. This move reflects a strategic shift in video ad planning, as CTV budgets are expected to double—from 14% in 2023 to 28% by 2025.

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