September 8, 2025
Gen‑AI to Power 40% of Video Ads by 2026, Says IAB Study Technology

Gen‑AI to Power 40% of Video Ads by 2026, Says IAB Study

The Interactive Advertising Bureau (IAB) has revealed in its 2025 Digital Video Ad Spend & Strategy Report that nearly 40% of video ads are projected to be created or enhanced using generative AI (Gen‑AI) by 2026. Currently, around 30% of digital video ads leverage Gen‑AI—up from about 22% in 2024—signifying rapid momentum in AI adoption by marketers

Industry Adoption: From Experimentation to Scale

According to the IAB report, 86% of digital video buyers are either already using or planning to use Gen‑AI for video ad creation. Small and mid-sized brands are leading the charge: by 2026, 45% of video ads by smaller brands will be AI-generated, compared to 36% for large brands.

These brands prioritize cost efficiency, rapid content production, and campaign scalability.

Top use cases for Gen‑AI include:

  • Generating ad variations for different audience segments (42%)
  • Visual style adjustments (38%)
  • Improving contextual relevance (36%)

Why the Surge? Benefits and Business Outcomes

The acceleration in Gen‑AI adoption reflects a convergence of benefits:

  • Lower production costs and faster turnaround times.
  • Scalable creative workflows, especially for localized or segmented campaigns.
  • Delivery of performance outcomes, such as driving sales or store visits, now the primary KPI for digital video buyers.

David Cohen, CEO of IAB, explained that Gen‑AI “democratizes advertising”, enabling brands to plan, optimize, and produce video ads more efficiently than ever before.

Global Trends & Platform Innovation

Gen‑AI’s ripple effects extend beyond demand-side adoption. Major platforms and social networks are integrating AI tools:

  • Meta Advantage+ now includes AI-driven image-to-video automation
  • TikTok Symphony integrates with Adobe, allowing prompt-based video generation
  • YouTube and Amazon are adding AI features to animate static assets and personalize videos using product data, leading to performance boosts like 30% higher click-through rates .

Experimentation with AI-generated content is also proving effective in real-world campaigns—on TikTok, Creatify AI-generated ads achieved eight times higher organic views and significantly stronger engagement than traditionally produced videos.

Challenges Remain: Consumer Trust and Quality Concerns

While advertising adoption is surging, consumer sentiment lags behind. A recent Nielsen survey found that many Gen Z and millennial viewers perceive AI-created ads as less authentic or intrusive—even when they correctly identify them as AI-generated. These impressions have dampened emotional resonance and recall among younger audiences.

Industry leaders stress the need for human-in‑the‑loop oversight, transparent disclosure, and quality assurance to balance creative automation with trust and credibility.

Final Take

As the digital advertising landscape continues to evolve, Gen‑AI is reshaping the creative process and enabling scalable, personalized storytelling for brands of all sizes. With nearly 40% of video ads expected to be powered by AI by 2026, Gen‑AI stands poised to become the backbone of future advertising strategies—offering speed, affordability, and strategic momentum.

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