• May 9th, 2026.
U.S. advertisers are on pace to pour roughly $82 billion into digital video in 2026, according to new IAB research, an 11% jump over last year that outstrips the broader ad market’s growth rate by nearly 20%. The category spans connected TV, online video, and social video (with YouTube counted in the social bucket), and the total has effectively doubled in size over the past five years as budgets continue migrating out of traditional television.
The findings come from part one of the 2026 IAB Digital Video Ad Spend & Strategy Report, produced alongside Advertiser Perceptions and Guideline. The report maps where video budgets are flowing across the three channels, what’s motivating those decisions, and how AI is reshaping the buying process. The money has to come from somewhere: 54% of marketers say they’re funding digital video by shifting dollars out of broadcast TV, four in ten are pulling from other traditional media, and 23% are even raiding digital audio budgets.
Digital video is expected to claim more than 60% of all TV/video ad spend this year, a first for the category. What makes that milestone more striking is the calendar: 2026 features the Olympics, the FIFA World Cup, and U.S. midterm elections, the kind of cyclical events that have historically propped up linear TV. Instead, as coverage of the report notes, the migration of those tentpole events to streaming platforms is helping digital gain share even in a cycle built to favor broadcast.
That said, the days of runaway expansion are over. Growth is running at about half the rate of the post-pandemic peak, which the IAB frames as normalization rather than weakness, consistent with the trajectory laid out in last year’s edition of the report, when spend grew 18% to $64 billion. On the category side, CPG remains the biggest source of digital video dollars at a projected $16.9 billion, followed by retail ($9.4B), tech ($7.5B), and pharma and entertainment ($7.4B each). Automotive is the lone decliner, expected to fall 2% amid higher vehicle prices, elevated interest rates, and tariff pressure.
IAB CEO David Cohen framed the moment around performance pressure: with all video trending toward digital and streaming, marketers are pushing harder than ever for measurable business results, and they expect creators and traditional Hollywood players to deliver them together. He noted that signal loss and the surge in non-human traffic make that demand even more pressing.
For the first time, social video’s growth rate (13%) has pulled ahead of CTV’s (11%). The report credits AI-driven personalization, creative optimization tools, and heavier brand investment in the creator economy for social’s momentum. Social video is also now the largest slice of the pie in absolute terms, projected to hit $31.9 billion this year, ahead of online video at $29.3 billion and CTV at $20.7 billion.
CTV isn’t slowing down so much as sharing the spotlight. Live sports migrating to streaming, from the NBA’s landmark 11-year deal with Amazon Prime Video to NFL games on Peacock and Netflix, continues to pull ad dollars into the channel, and nearly every major streamer has now bought into live sports as an audience and advertising engine. CTV adoption is also broadening at the low end of the market: the share of small advertisers investing in the channel has climbed from 60% in 2024 to 85% in 2026 as self-serve platforms lower the barrier to entry. Jamie Finstein, who leads IAB’s Media Center, said buyers are drawn to social’s creator dynamics and AI tooling, but views innovation in both environments as a net positive for the whole video ecosystem.
In a notable shift, targeting capability has replaced content quality as the number-one factor buyers weigh when making TV/video investments. Targeting was cited by 49% of respondents, up 10 points year over year, edging out content quality at 46%, with overall reach (39%), guaranteed business outcomes (36%), and price efficiency (32%) rounding out the list.
The change reflects mounting anxiety over deteriorating IP-based identity signals and AI-generated traffic muddying audience data, concerns the IAB has been flagging across its research, including its 2026 Outlook Study. Small and mid-size advertisers are driving the trend most aggressively, increasing their emphasis on targeting by 23 points year over year, which makes sense given they’re also the most exposed to identity degradation in the open marketplace, with fewer first-party data assets to fall back on.
Agentic AI has moved out of the lab and into media plans. Roughly two-thirds of digital video buyers are either running it live (21%), testing it (20%), or planning to deploy it this year (25%). Another 28% are actively evaluating it, leaving just 6% who say it isn’t on their roadmap at all. For now, adoption is concentrated in decision-support functions rather than autonomous purchasing: media planning and buying recommendations, inventory discovery and evaluation, and creative testing were each cited by about half of the buyers using or planning to use the technology, per the full report.
How advertisers use it depends on their size. Smaller spenders are applying AI to creative testing, pre-planning, and performance analysis, while larger advertisers, juggling sprawling campaigns with many partners and deal structures, are prioritizing inventory discovery and evaluation. Chris Bruderle, IAB’s VP of Industry Insights & Content Strategy, suggested this divergence is a feature, not a bug: different starting points mean the industry will learn what works across the full value chain that much faster. Finstein added that AI is embedding itself into every stage of video planning, buying, and measurement where it genuinely improves the process, and its footprint will only grow from here.
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