Digital video ad spend surges as AI and targeting reshape strategy
According to the "2026 IAB Digital Video Ad Spend & Strategy Report: Part One," which was just published, AI, targeting, and outcome accountability are increasingly finding their primary homes in digital video. According to the report, this is a market that is expanding rapidly and is becoming increasingly automated. The report predicts that digital video advertising spend in the United States will rise by 11% annually and nearly 20% faster than the overall advertising market. Digital video will consolidate its structural dominance, accounting for more than 60% of all TV and video spending for the first time. Expectations shift naturally in response to an increase in investment. At this scale, advertisers typically place a higher value on automation, interoperability, and consistent outcome measurement. Video is now more about supporting ongoing performance goals rather than testing. The growth of CTV shifts from advantage to access. The value of CTV will shift away from its availability and toward its capacity to deliver precise, efficient, and measurable outcomes as it expands and attracts a wider range of advertisers. CTV is expected to grow by 11% in 2026, making it one of the strongest growth engines. Growth is being driven by three factors: the shift from linear television to streaming environments for live content, such as major sports and marquee events. programmatic access to inventory in greater depth. enhancing the evidence of business outcomes. At the same time, streaming isn't just for big advertisers any longer. Self-service platforms and simpler activation are driving a significant increase in adoption from 60% in 2024 to 85% in 2026 among small and mid-sized advertisers. Your clients look everywhere. Ensure that your brand is visible. the SEO toolkit you are familiar with and the AI visibility data you require. Get a Free Trial Start by using One Semrush Logo Targeting buyers is more important than content quality. When it comes to ad spend, the ability to fine-tune targeting is now more important than content quality. Small and medium-sized advertisers were responsible for a 23-point rise in the importance of targeting, which increased by 10 points from one year to the next. Since these advertisers typically do not have access to large, proprietary data sets, accurate targeting in biddable environments is even more important. Traditional reach and content considerations are no longer as significant as identity durability, improved data integration, and AI-supported audience modeling. Recommended Books ChatGPT-Image-Executive-trust-in-marketing-concept
From the concept to the operating layer, agentic AI moves. In 2026, agentic AI will be used by two-thirds of purchasers of digital video. Additionally, the majority of remaining buyers are actively assessing agentic solutions. Before spending any money, agentic AI is primarily being used to reduce friction. Among the planned and current AI use cases are: Buying and planning recommendations for media. Inventory discovery and evaluation.
Optimization and creative testing brief analysis and pre-planning. insights into outcomes and performance analysis. For workflow-related functions, smaller advertisers are utilizing AI to supplement their limited internal infrastructure. To manage fragmentation across PMPs, direct deals, and open auctions, larger advertisers place a premium on AI in inventory discovery. When it comes to making decisions that have a financial impact on the outside world and require human judgment, the use of AI decreases. Obtain Relevant MarTech Insights Trends in the industry, strategy analysis, and platform news. More than 40,000 marketing professionals rely on it. In 2025, social video overtook CTV in terms of total spending, and that gap is expected to grow in 2026. This is connected to the measurement, creative optimization, and personalization capabilities enabled by AI that are incorporated into native platform stacks. Social video has the advantage of being able to quickly test and adjust creative, targeting, and delivery with AI, but it is increasingly used in conjunction with CTV and viewed as a complement rather than a stand-alone video strategy. To summarize: The report identifies three major industry trends. Aligning AI investments with workflow requirements is the first step. Agentic AI is already providing value in areas where teams face scale, complexity, or resource constraints. Next, altering video success metrics to emphasize outcomes validation more. Last but not least, advertisers place a high priority on partners who are able to provide transparent and dependable targeting due to the environment's limited signal supply. You can find the entire report here. Authors who are selected for their expertise and contributions to the martech community are invited to contribute content to MarTech. The editorial staff oversees the work of our contributors, and their contributions are evaluated for quality and relevance to our readers. Semrush is the owner of MarTech. The contributor was not asked to mention Semrush in any way, either directly or indirectly. They are entitled to their own viewpoints.