Despite turbulent conditions, the digital ad industry proves its resilience with sustained growth in 2025 dominated by search.
The digital ad industry has reached its highest recorded revenue level, generating $294.6bn in 2025 – a 13.9% increase from $258.6bn in 2024.
This is backed by strong growth in the digital video sector, with connected TV (CTV), social, short-form, and online video showing 25.4% year-on-year (YoY) growth, compared to 19.2% the year before, according to the IAB’s, in partnership with PwC, Internet Advertising Revenue report.
Revenue growth was stable through each quarter, with Q1 seeing a 12.2% in quarter-on-quarter (QoQ) growth from 2024, followed by a 12.8% QoQ rise in Q2. Growth accelerated into Q3 reaching with 14.9% and 15.4% in Q4, which saw revenue expand by $11.4bn.
The report noted the growth of digital advertising in 2025 “reflected the broader macroeconomic uncertainty in the first half of the year, espeically with the impact of US tariff dyanmics”.
Search marketing still biggest digital channel
Search marketing revenue maintained the largest market share at 38.8%, despite disruptions coming from developments in AI and AEO. However, growth in the channel was slower YoY at 11%, compared to the 15.9% in 2024.
This shows growth is stabilising as advertisers adapt their strategies to sustain and expand into new channels.
Programmatic advertising revenue also fuelled growth, with a 20.5% (or $27.6bn) increase bringing the total to $162bn.
Total display, which includes banners, rich media, sponsorship, and native performance marketing revenues reached $81.6bn – which equates to a YoY growth of 9.8% or an increase of $7.3bn. The figures underline the importance of commerce media and programmatic media as principal drivers of growth, with positive signals for industry health.
Social media and commerce
Social media forms a significant portion of revenue growth – earning $117.7bn, which equates to a roughly $29bn growth, or 32.6% YoY. Social media has been a consistent contributor to the industry, with large scale reach, engagement, and measurable outcome.
This social media momentum has translated into the creation of a creator economy, which is growing at twice the rate of the broader ad market – with spend projected to reach $44bn in 2026, according to the report.
Commerce media also experienced revenue growth reaching $63.4bn – a 18% YoY rise which equates to $9.7bn more than in 2024. This reflects the sector’s move towards conversion and data-driven media ecosystems including off-site, in-store and cross-partner environments, as advertising becomes tied more closely to measurable outcomes.
AI reshaping discovery
Artificial intelligence is playing an increasingly important role in advertising infrastructure, and is “reshaping how consumers discover products and how advertising is planned, executed, and monetised”, the report stated.
Marketers are some of the most enthusiastic adopters of AI, with 80% of industry professionals using the tech in one form or another. However, emerging agentic AI systems are threatening to transform how commerce itself operates with agency-side operations being pushed towards autonomous buying.
“For years we talked about digital as if it were separate; eventually it just became marketing and media,” said David Cohen, IAB chief executive.
“I think AI will follow a similar path. And one belief we’ll probably look back on as outdated is the traditional corporate ladder. Technology is becoming a great equaliser. Today, someone can go from entry-level to founder or industry leader far faster than was imaginable in the old model. That’s a real shift and, frankly, an exciting one.”
