The Future of Video Advertising: How Gen AI is Revolutionizing Ad Creation by 2025

The landscape of video advertising is on the brink of a transformative shift, with generative AI (Gen AI) leading the charge. The Interactive Advertising Bureau (IAB) recently released insights from its "2025 Digital Video Ad Spend Strategy Full Report," revealing that nearly 90% of advertisers are set to embrace Gen AI for crafting their video ads. This shift is not just about adopting new technologies; it's reshaping the core strategies advertisers deploy in reaching consumers efficiently and effectively.

Gen AI: A Game Changer for Advertisers

Fifty percent of advertisers are already incorporating Gen AI into their video ad campaigns, and that figure is expected to rise dramatically by 2026. David Cohen, CEO of IAB, emphasized that the economic landscape of advertising is evolving. As production costs plummet, opportunities are multiplying for advertisers across the spectrum. This democratization of advertising means that smaller brands can compete with larger corporations by leveraging sophisticated technological tools that were once out of reach.

One of the key factors driving this change is Gen AI's ability to facilitate the rapid creation of high-quality content. Not only does it enable advertisers to efficiently produce video ads at scale, but it also allows brands to tailor their messages for various audiences effectively. A staggering 86% of advertisers are already utilizing or plan to utilize Gen AI for their video creative, showcasing its growing significance in ad production.

Shifting Expectations for Connected TV (CTV)

The report highlights that expectations surrounding CTV advertising are rising as more buyers anticipate that nearly half of CTV inventory will be biddable. Last year, this figure was only 34%. Alongside this trend, 74% of advertisers are either building or planning to build in-house teams to manage CTV activations, reflecting a desire for increased autonomy and control over their advertising efforts.

Amidst the growing popularity of live sports and other streaming content, buyers are looking for enhanced interactive experiences that provide real-time data insights. This indicates a shift towards a more sophisticated approach to CTV engagement, moving beyond traditional linear TV expectations.

Chris Bruderle, Vice President of Industry Insights at IAB, noted that advertisers are eagerly anticipating improved capabilities for live content on streaming platforms.

Focus on Business Outcomes

In an environment marked by economic uncertainty—stemming from geopolitical tensions and changing consumer attitudes—advertisers are prioritizing measurable business outcomes. As CTV advertising emerges as a performance-driven channel, advertisers are holding it to the same standards as social video platforms. Increasingly, buyers demand immediate results. In fact, business outcomes such as sales and offline store visits have become the primary key performance indicators (KPIs) for video buyers.

Bruderle summed it up succinctly: "Deliver, or you'll get cut." This focus on tangible results and the effectiveness of campaigns underscores the changing dynamics in advertising today.

The Evolving Role of Strategic Partnerships

As video advertising transitions into a new era, advertisers are seeking partners that not only offer access to Gen AI solutions but also help them unleash its full potential. The complexity of measurement, standardization, and cross-channel data continues to challenge small to mid-sized brands. These businesses often struggle to navigate the intricacies of modern advertising, highlighting the importance of strategic partnerships in delivering meaningful results.

IAB's report illustrates a vibrant and rapidly evolving future for video advertising, where Gen AI will play an integral role in shaping engagement strategies. This transition signifies a pivotal moment not only for advertisers but also for consumers, as the content they encounter becomes increasingly personalized and contextually relevant.

In summary, as we look toward 2025, Gen AI is poised to revolutionize the advertising landscape by empowering brands—regardless of size—to create impactful video content that resonates with audiences, ultimately driving business success in a competitive marketplace.