Rapid Expansion in the Use of Generative AI for Video Production
Generative AI Transforms Digital Video Advertising
The use of generative AI in digital video advertising is rapidly expanding, with nearly 90% of advertisers planning to use generative AI for video ad creation by the end of 2026, according to the Interactive Advertising Bureau's (IAB) 2025 Digital Video Ad Spend & Strategy Full Report.
This shift from traditional video ad production methods is significant, with 86% of video ad buyers already using or intending to implement generative AI to develop creative content.
Key factors driving this change include cost reduction and democratization, increased efficiency and scale, growth in programmatic and Connected TV (CTV), a focus on business outcomes, and greater adoption among small and mid-tier brands (SMBs).
Generative AI lowers production costs dramatically, enabling more advertisers to create high-quality video ads without the large budgets traditionally required. This democratization is expanding the pool of potential advertisers. AI also enables faster development, testing, and scaling of video campaigns, allowing brands to optimize and produce more personalized content efficiently.
The maturation of programmatic buying, with the share of CTV inventory available for automated purchase expected to increase from 34% to 47% by 2026, supports the automated delivery and targeting of AI-created ads, enhancing their reach and effectiveness. Advertisers are increasingly prioritizing key performance indicators such as store visits and sales conversion, with AI-enabled video ads contributing to more measurable business results.
Small and mid-tier brands are adopting generative AI faster than large brands, benefiting most from the lowered barriers in video production and creative development.
The IAB's survey reveals that 90% of buyers either use or plan to use GenAI, with a strong emphasis on human oversight. Nearly one-third of all digital video creatives today leverage GenAI tools such as ChatGPT, Gemini, Synthesia, and Runway.
To harness GenAI effectively, marketers should establish clear guidelines on when and how to apply GenAI, defining roles for AI versus human collaborators, setting prompt standards, and documenting revision workflows. Marketers should also implement experiments that compare AI-produced versus traditionally produced video performance, tracking metrics such as view-through rates, click-through rates, and post-view conversion lift.
As GenAI tools mature, the share of AI-driven creatives is expected to exceed 50% by 2027. The real battle will be over human-AI collaboration, with brands that blend AI's efficiency with human creativity, ethics, and strategic oversight achieving the greatest competitive advantage.
The IAB expects the share of digital video ads using GenAI to reach 39% by 2026. Demand for sell-side facilitation is high, with 46% of buyers wanting publishers and platforms to actively facilitate GenAI creative testing, leveraging platform data and insights to inform AI-driven concepts and streamline experimentation. The most common application of GenAI in digital video ads is audience versioning, which enables precise message tailoring through programmatic insertion of text, visuals, or audio variants (42% of buyers).
In summary, the evolution of generative AI use in digital video advertising reflects a broad industry transformation toward more automated, accessible, and performance-driven ad creation and distribution. The growing integration of AI tools, combined with expanded programmatic CTV environments, is expanding creative possibilities while making high-impact video ads feasible for more advertisers of varying sizes.
- With the growing adoption of generative AI, the business landscape of video advertising is transitioning towards more efficient and cost-effective investments in technology, enabling smaller brands to contest the market with their larger counterparts.
- The imminent rise of artificial intelligence in video advertising markets signifies a significant shift in the investing strategies of businesses, prioritizing technological advancements for increased efficiency, scale, and personalization.
