Observed Signal · May 5, 2026 · Research Report · Source: https://martech.org/feed/ · Impact: 3/5 · Sentiment: Positive
Digital Video Ad Spend Rises as AI and Targeting Accelerate
The Interactive Advertising Bureau (IAB) projects U.S. social video ad spending will grow 13% in 2026, outpacing connected TV (CTV) growth projected at 11%, signaling a shift toward feed-based platforms. The IAB’s findings — based on a survey of 360 U.S. marketers who spent at least $1M last year — estimate total U.S. digital video spend reaching $80 billion in 2026. Industry sources cited falling production costs from generative-AI creative tools, stronger targeting capabilities for smaller advertisers, and rising user video consumption (Meta reported an 8% rise in video watch time in Q1 2026; YouTube ad sales rose 10.7% to $9.88B) as drivers. While CTV continues to grow, programmatic CTV and quality adjacencies remain meaningful draws; nearly half of surveyed brands (49%) named targeting capability as their top investment criterion, up 23% year-over-year. The article includes quotes from agency and brand executives describing budget shifts from CTV to social video.
An authoritative industry report showing strong growth in digital video, rising CTV and social video spend, and widespread adoption of agentic AI — relevant for media buyers, platforms, and adtech vendors planning strategy and product roadmaps.
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Key Takeaways & Evidence Grounding
- IAB projects social video ad spending growth of 13% in 2026 versus CTV growth of 11%.
- IAB surveyed 360 U.S. marketers (each spent at least $1M last year) and estimated total U.S. digital video spend at $80 billion in 2026.
- Meta reported an 8% increase in time spent watching videos in Q1 2026; YouTube ad sales rose 10.7% to $9.88 billion in Q1.
- Nearly 49% of surveyed marketers listed targeting capabilities as their top criterion for where to invest, a 23% increase year-over-year.
- Falling video production costs from generative-AI creative tools and improved targeting for small and mid-sized advertisers are cited as key drivers of social video spend.
Connected Companies & Entities
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Related Market Signals & Shifts
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Digital video enters new era of competition
IAB’s “2026 Digital Video Ad Spend & Strategy Report” finds U.S. digital video ad spending is forecast to reach $81.9 billion in 2026, growing 11% this year and representing 61% of all U.S. TV and video ad spending. The report highlights three trends: targeting has become the top buying priority, social video is outpacing connected TV in buyer preference and spend momentum, and agentic AI is being adopted as an operational tool (used for planning, testing and analysis) while not yet entrusted with spending decisions. IAB projects social video spending of $31.9 billion versus $29.3 billion for connected TV. The findings are based on Guideline billing and forward-booking data, market estimates, industry interviews and a survey of 360 agency and brand decision-makers conducted Feb. 20–March 13, 2026.
Digital Video to Capture 61% of US TV/Video Spend
VideoWeek’s Week in Charts summarizes multiple industry reports showing a continued structural shift toward digital video and rising AI use in video production. IAB projects digital video will account for 61% of US TV/video ad spend in 2026, up but growing more slowly than last year. iSpot research finds streaming partners are sharing more reach and frequency and demographic data but offer less visibility on attribution, programming and linear/streaming overlap. EMARKETER and Admazing report over 70% of US marketers rarely consider mobile gaming a core channel despite many seeing incremental reach potential. Wistia data shows increasing adoption of generative AI for video—69% using AI captions, 39% AI visuals and 25% AI avatars (2025 vs 2024). The piece also highlights sector stock moves, including LiveRamp/ Publicis M&A news and Nexxen revenue-driven gains.
AI Spurs AdTech Alliances; Social Video Outgrows CTV
AdExchanger’s roundup highlights how agentic AI is driving unexpected partnerships across the ad-tech stack — from The Trade Desk embedding its DSP through Pacvue and Skai to Yahoo integrating its DSP workspace into Kochava’s StationOne — enabling shared agentic workflows and reducing duplicated tooling. The IAB projects U.S. digital video ad spend will surpass $80 billion in 2026, with social video ad spend growing ~13% year-over-year versus an ~11% gain for CTV, driven by AI personalization and clearer performance attribution on social platforms (YouTube is classified as social video alongside Instagram and Reddit). The piece also notes over 1,200 consumer-facing ChatGPT/Claude integrations with major brands, but early adoption is low due to discoverability constraints. Additional items: FTC/Media Matters settlement, Meta’s use of “AI bone structure analysis,” Viant’s close of TVision acquisition, and several industry hires including NextRoll’s new CTO.
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