U.S. digital video ad spending is expected to exceed $80 billion in 2026, but the bigger story in the IAB’s latest report is how AI adoption is split between small advertisers seeking agility and big brands managing complexity.
U.S. digital video ad spending is expected to exceed $80 billion in 2026, up 11% year over year and outpacing the advertising market by nearly 20%. On paper, this looks like another strong year for streaming, social video, and connected TV. But buried in the IAB’s latest report is a more interesting insight into how advertisers are actually operating.
AI is not being implemented in one neat way across industries, creating a polarized market.
Small and medium-sized advertisers are using AI tactically. They’re testing creative faster, refining media plans before money is spent, and digging into performance data to understand what’s working. For them, AI is a way to move faster and reduce wrong bets. It is practical, immediate and closely tied to results.
Big advertisers are approaching this from a different angle. They are focused on navigating complexity, as campaigns are sprawling, there are multiple partners, and inventory to manage is tiered. AI is helping discover inventory, assess supply chains, and understand fragmented ecosystems. It is not only about efficiency but also control.
Chris Bruderle, IAB’s vice president of industry insights and content strategy, explains: “Consumers start from different places and discover different needs along the way, reflecting the breadth of opportunities that technology provides.” This means that there is not one universal approach emerging here. There are several plans available, depending on the size, structure, and complexity of your media plan in the first place.
This difference helps explain alternative developments in the data. Targeting has now replaced content quality as the top priority for video investments. This shows that signal loss and identity issues require marketers to rethink what actually drives performance. The harder precision becomes, the more valuable a tool that promises to restore it becomes.
At the same time, nearly every buyer is currently somewhere on the AI adoption curve. Two-thirds have already deployed and plan to test or deploy agent AI in their video campaigns. “AI is increasingly being integrated into every step of the video value chain, meaningfully improving how we plan, buy, and measure,” said IAB Vice President Jamie Finstein. “By 2026, its impact will already be widespread, and its role will deepen as the industry evolves.”
Want to know more? ask the drum
Going beyond CTV, social video is coupled with an environment where AI can work more powerfully to personalize content, optimize delivery, and feed back into performance loops faster than traditional channels.
What this report shows is that the industry is understanding itself in real time. Smaller players use AI to punch above their weight. Large companies use it to ensure that their systems don’t collapse due to their complexity. Both are valid. Both are required.
The second part of the report, scheduled for the IAB Video Leadership Summit in July, will dig deeper into how these strategies drive results. But these signs indicate that AI is not creating a single future for video advertising. Multiple paths are created depending on where you start and what you are trying to fix.
