Key Takeaways

  • Despite economic headwinds and the absence of cyclical events like the Olympics, U.S. digital advertising revenue grew 13.9% year-over-year in 2025 to a record $294.6 billion, according to an annual report jointly released by the Interactive Advertising Bureau (IAB) and PwC.
  • Video, creator content, and performance media formed the three pillars of growth, while artificial intelligence is reshaping ad discovery, creative production, and monetization paths. Creator advertising outpaced the overall market, while search advertising growth slowed notably.
  • The study, now in its 30th consecutive year, notes that several trends driving digital ad growth are also pushing further consolidation among top global platforms—advertisers increasingly rely on scaled reach, richer first-party data, and integrated e-commerce capabilities to succeed.

Deep Dive

The IAB's latest assessment of the internet advertising economy shows that social media and creator-led marketing campaigns continue to rise steadily and, after a period oflarge advertisers shifting more budgetsto this area, are increasingly becoming institutionalized within marketing organizations.

Social media ad revenue grew 32.6% year-over-year in 2025 to $117.7 billion, roughly matching the previous year's growth rate. This channel now holds a 40% share of the total digital ad market, the largest of any channel, and is shifting the balance of power among top platforms.

According to a recent eMarketer forecast, Meta, Instagram's parent company,is expected to surpass Google for the first time in 2026—which has long held the top spot in digital ad revenue—in both U.S. and global ad revenue. The search channel, the cornerstone of Google's ad business, is in decline, with revenue growth nearly 5 percentage points lower than in 2024. Search ads still generated a hefty $114.2 billion for the year with a substantial market share, but the full-scale entry of AI is rapidly changing user habitsand monetization strategies.。

Meanwhile, the IAB notes that creator content has evolved from an add-on to a "core media channel" for advertisers. The creator economy generated $37 billion in spending last year and is projected to reach $44 billion in 2026—brands are moving from one-off campaign collaborations to "always-on" models that combine micro-creators, affiliate marketing, and performance-driven creators.

"Brands are embedding creators into the foundation of their media strategies, operational processes, and even product development," the IAB said in the report, furthernoting that ad agencies are alsobuilding more comprehensive creator service capabilities.。

The rise in creator value is driven by more than just follower counts. More creators are leveraging commerce media to drive transactions, tying brand building and performance marketing more closely together. Overall commerce media revenue grew 18% last year to $63.4 billion, but its growth rate slowed by 5 percentage points compared to 2024.

Additionally, as news feeds are flooded with low-quality AI-generated content (so-called "slop"), more consumers are drawn to the human touch of creators. AI is also causing other headaches for advertisers—the IAB estimates that over 50% of global web traffic now comes from bot activity. Seizing on the AI transparency crisis, the industry body is calling for more industry measurement and interoperability standards, including through itsrecently launched Project Eidos initiativeto advance these efforts.

Other notable trends identified by the IAB include: the video category (spanning connected TV, social video, and online video) grew revenue 25.4% year-over-year in 2025 to $78 billion, accelerating from the prior year. Gaming and esports revenue growth also jumped to 22% from 2024, driven by more mature in-game ad formats, higher demand, and more refined measurement.

Despite significant shifts in the industry's underlying dynamics, the digital ad market does not appear to be headed for a major shakeup. After brandsdiversified some media budgets to mid-sized companies in 2024,industry power has again consolidated toward established giants. In 2025, the top ten global media platforms increased their share of digital ad revenue by 3.4 percentage points, collectively capturing 84.1% of the total market, while smaller and mid-sized platforms saw their budget shares shrink.