Digital video is becoming a primary environment for AI, targeting and accountability for results, according to the “2026 IAB Digital Video Ad Spend & Strategy Report: Part One.” The report shows a rapidly growing market that is more automated and more demanding than ever when it comes to precision.
According to the report, U.S. digital video ad spending will grow 11% year over year and nearly 20% faster than the overall ad market. For the first time, digital video will account for more than 60% of total TV and video spending, cementing its structural dominance.
Increased investment naturally leads to changing expectations. Advertisers at this scale tend to prioritize automation, interoperability and more consistent results measurement. Video has become less about testing and more about supporting ongoing performance goals.
CTV’s Growth Shifts from Access to Advantage
As CTV scales and attracts more advertisers, its value lies less in its availability and more in its ability to deliver accuracy, efficiency and measurable results. CTV remains one of the most powerful growth engines, with expected growth of 11% in 2026, fueled by three elements:
- The migration of live content, including major sporting events and major events, from linear television to streaming environments.
- Deeper programmatic access to inventory.
- Improve proof of business results.
At the same time, streaming is no longer reserved for large advertisers. Small and mid-sized advertisers are jumping in in significant numbers, with adoption increasing from 60% in 2024 to 85% in 2026, driven by self-service platforms and easier activation.
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Targeting is more important than content quality for buyers
The ability to refine targeting is now more important than content quality when it comes to ad spend.
The importance of targeting increased by 10 points year-over-year, with small and medium-sized advertisers seeing an increase of 23 points. These advertisers often operate without the benefit of large, proprietary data sets, making reliable targeting in auction-driven environments more critical. Identity sustainability, better data integration and AI-driven audience modeling are now as important as traditional reach and content considerations.
Agentic AI moves from concept to operational layer
Two-thirds of digital video buyers are already online, testing, or planning to use agentic AI in 2026. Additionally, most of the remaining buyers are actively evaluating agentic solutions.
Agentic AI is primarily deployed in areas that reduce friction before funds are committed. Current and planned use cases for AI include:
- Media planning and buying recommendations.
- Discovery and assessment of stocks.
- Creative testing and optimization.
- Pre-planning and brief analysis.
- Performance analysis and results information.
Small advertisers are using AI to augment the limited internal infrastructure of workflow functions. Large advertisers are prioritizing AI in inventory discovery to manage fragmentation across PMPs, direct deals and open auctions. The use of AI declines when it comes to making decisions that are externally binding and financially binding, indicating that human judgment still anchors final commitments.
The advance of social video strengthens the effect of AI
Social video overtook CTV in total spend in 2025 and is expected to widen that lead in 2026. This is tied to AI-driven personalization, creative optimization, and measurement capabilities built into native platform stacks.
While social video benefits from the ability to quickly test and adjust creative, targeting and delivery using AI, it is increasingly being bundled with CTV and treated as a complementary engine rather than a standalone video strategy.
Conclusion
The report highlights three key trends in the industry. The first is to align AI investments with workflow needs. Agentic AI is already delivering value in areas where teams face scale, complexity or resource constraints. Next, modify video success metrics to place more emphasis on validating results. Finally, due to the signal-constrained environment, advertisers prioritize partners who can offer reliable and transparent targeting.
