There have been a range of reports from across the global IAB network over the last month analysing digital advertising investment trends and market sentiment that we have analysed to provide an overview of market themes and although there are some market nuances there are more similarities than differences. Links to the reports are at the end of this article (some require local IAB membership to access).
Video, social and commerce media continue to attract investment, but deeper changes are reshaping how advertising is planned, measured and delivered.
Digital advertising continues to expand, but the forces shaping that growth are evolving.
Across market reports and industry outlooks in Australia, New Zealand, the UK, the US and Europe, the headline story remains positive. Investment continues to rise and digital channels account for a growing share of media budgets. Beneath that however, the structure of the market is shifting. Video is taking a larger share of spend, commerce media is moving into the mainstream, and automation is influencing how campaigns are planned and executed.
For the industry, the more interesting story is not simply where budgets are moving, but how advertising itself is changing. The market is becoming more automated, more commercially accountable and more closely linked to business performance.
Several themes are becoming clear.
Video continues to lead the market
Video remains one of the strongest drivers of digital advertising growth. Investment is expanding across social video, connected TV and premium streaming environments as advertisers look to combine reach, storytelling and measurable performance.
At the same time, the video landscape is becoming more diverse. Rather than treating video as a single channel, marketers are planning across multiple video environments, each playing a different role in the overall media mix.
Large cultural and sporting moments continue to reinforce the value of scaled video environments. At the same time, the rise of creator led video content means that reach is increasingly distributed across both professional media and creator ecosystems.
For marketers, the question is less whether to invest in video and more how to balance investment across the expanding range of video environments.
Social platforms remain central to digital strategies
Social platforms continue to attract a significant share of advertising investment. Short form video in particular has become a core part of both brand and performance strategies, offering creative flexibility, scale and rapid feedback on campaign performance.
For many advertisers, social video has moved well beyond experimentation and is now firmly embedded in the media mix. It often acts as both a discovery environment and a testing ground for creative ideas that later appear across other channels.
The influence of social platforms also reflects the growing role of creators within the advertising ecosystem. Creators are not only producing content but also shaping discovery, recommendation and purchase behaviour across a wide range of categories.
Retail and commerce media are becoming mainstream
Retail and commerce media continue to reshape the market. Retailers and marketplaces are increasingly acting as media owners, using first party data and purchase signals to connect advertising investment more directly to sales.
Off site retail media and shoppable formats are extending these capabilities beyond retailer environments, allowing brands to activate commerce data across a broader range of media channels.
As the sector matures, growth expectations in some markets are becoming slightly more measured. This reflects the natural progression of a rapidly emerging sector as retailers, agencies and brands refine operating models, measurement standards and inventory supply.
The strategic importance of commerce signals however remains clear. The closer link between media exposure and purchase behaviour is influencing how performance budgets are allocated.
Measurement expectations continue to rise
Advertisers are placing greater emphasis on measurable outcomes and clearer links between marketing investment and business performance.
This is driving demand for stronger attribution, cross platform measurement and clearer evidence of effectiveness. Media environments that can demonstrate their contribution to growth are increasingly well positioned to attract investment.
At the same time marketers are becoming more sophisticated in how they interpret results. Rather than relying on a single metric, many organisations are combining incrementality testing, attribution models and broader commercial indicators to understand marketing performance.
For the industry, the focus is shifting from measuring activity to measuring impact.
From channels to systems
One of the most significant changes underway is the move away from thinking about media purely in terms of channels.
Large platforms, retailers and media companies are increasingly building integrated systems that combine data, media access, creative tools, optimisation and measurement.
Rather than selecting channels in isolation, advertisers are increasingly working within these systems to manage planning, buying and optimisation across multiple environments.
This shift reflects a broader change in how digital advertising operates. The companies that control these systems increasingly shape how budgets flow across the market.
The deeper shifts shaping the market
Alongside these familiar trends, several underlying forces are quietly reshaping the industry.
Advertising is becoming less tied to the economic cycle
Historically, advertising spend rose and fell closely alongside economic growth.
Today that relationship appears to be weakening. Advertising investment is increasingly influenced by corporate profitability and global advertiser demand rather than local economic conditions alone.
Companies with strong margins can continue investing in marketing even when economic sentiment softens. At the same time global digital platforms allow advertisers to reach audiences across multiple markets regardless of local economic cycles.
This helps explain why digital advertising can continue to grow even when broader economic indicators appear mixed.
Global advertisers are reshaping local markets
Digital platforms have effectively turned advertising markets into global marketplaces for attention.
Brands and ecommerce companies can reach consumers in almost any market, meaning local advertising markets are increasingly influenced by international advertisers as well as domestic ones.
In several regions cross border demand from international brands has become a meaningful contributor to digital advertising growth. This can bring new investment into local markets while also increasing competition for attention.
The next wave of growth may come from new advertisers
Despite the scale of digital advertising today, many businesses still do not advertise online.
As advertising tools become easier to use and more automated, smaller companies are increasingly able to participate in digital marketing.
Small and medium sized businesses represent one of the most significant opportunities for future growth. Individually their budgets may be modest, but collectively they represent a large and expanding base of potential advertisers.
Many of the largest digital platforms have built their growth strategies around this expanding advertiser base.
The real battleground is shifting to decision systems
Historically, the key asset in advertising was access to audiences or media inventory.
Increasingly, the advantage lies in the systems that determine how marketing budgets are allocated and optimised.
Platforms that combine audience data, creative tools, automation and measurement into integrated decision systems are likely to attract a growing share of advertising investment.
These systems increasingly influence not just where advertising appears, but how budgets move across channels and formats.
Creator media is becoming part of the infrastructure
Creator partnerships are evolving from occasional campaign tactics into a structured part of media strategies.
Creators across video, social and audio platforms increasingly function as independent media businesses. They attract loyal audiences and provide brands with opportunities to combine cultural relevance with measurable outcomes.
Brands are building more formal processes around creator selection, briefing and measurement. Rather than being used only for individual campaigns, creator activity is increasingly integrated into ongoing media strategies.
In that sense, creator led media is becoming a permanent layer of the advertising ecosystem.
Supply is expanding faster than attention
Another dynamic shaping the market is the rapid expansion of advertising supply.
Streaming platforms, retail media networks, creator content and digital out of home environments are all increasing the amount of available inventory.
While advertiser demand continues to grow, the number of places where advertising can appear is expanding even faster. This places greater emphasis on quality environments, strong audience engagement and clear evidence of effectiveness.
For media owners, demonstrating value is becoming just as important as delivering scale.
The bigger picture
Digital advertising continues to grow, supported by strong investment in video, social media and commerce driven advertising.
At the same time the foundations of the market are evolving. Advertising is becoming less tied to traditional economic cycles and more influenced by global advertiser demand, automated decision systems and a broader base of advertisers.
Creators, retailers and smaller businesses are all becoming more visible participants in the advertising ecosystem.
For both buyers and sellers, success will increasingly depend on the ability to operate within this more connected and commercially accountable market while continuing to deliver marketing that genuinely drives business growth.
Reference Materials:
IAB Australia Internet Advertising Revenue Report