The Interactive Advertising Bureau (IAB)’s 2025 Digital Video Ad Spend & Strategy Report shared that 90 percent of advertisers will use AI tools to create video ads by 2026.
The Digital Ad Spend Report is released annually, split into two parts. It shares data on how much was spent on digital advertising in the UK. The report is segmented into categories such as by different ad formats, platforms, and industries.
Created in collaboration with market research company Advertiser Perceptions and AI ad planning platform Guideline, the second instalment of the report includes insights on the impact of AI on ad production.
The report also included that 86 percent of ad buyers currently use or plan to use AI for video ad creation.
The report shared that small and mid-tier brands are more quickly adopting AI into their ad production process in comparison to larger brands. The report also found that ad buyers predict that 40 percent of all ads will have used AI by 2026.
More advertisers are turning to AI for ad creation as the tools offer more cost efficient production avenues. The IAB report documented that 42 percent of advertisers use Gen AI to generate different versions of ads for different audiences. 38 percent of advertisers use AI to edit visuals, and 36 percent use it to adjust contextual relevance.
Using AI tools to carry out these production processes eliminates the need for a larger team or extensive resources. Previously, many of these capabilities were only accessible for larger brands.
Controversial Ad Creation?
In recent years, the use of AI has been controversial in video ad production. In 2024, a fully AI-generated Christmas ad from Coca-Cola was scrutinised for being “soulless”. Other criticisms have centred around the use of AI in replacement of creative roles in advertising, with fears around the technology replacing jobs.
However, upgrades to AI video generation tools have made them even more appealing to advertisers and creators. Food chain Popeye’s recently used Google’s Veo 3, a prominent AI video generation model, to create a comedic AI-generated ad dissing competing chain McDonalds.
“The economics of advertising are being transformed. As the costs of production fall, the opportunities for advertisers multiply.” said David Cohen, chief executive officer of IAB. “The democratisation of advertising and marketing is entering an exciting new phase, and the outlines of a new future are coming into view fast.”
