Search advertising is one of the largest digital ad categories, but its growth is slowing as social media and video post faster gains, according to IAB’s annual report, conducted by PwC.
What The Data Shows
In 2025, digital advertising revenue reached $294 billion, reflecting a 13% increase from the previous year. The report uses self-reported revenue data from companies selling advertising online. PwC says it does not audit the information or provide assurance.
Search advertising, including AI search, generated $114 billion, making it one of the largest segments in the report, though IAB’s category definitions overlap.
Search saw an 11% growth year-over-year, slower than the 15% in 2024. Social media experienced stronger growth, with ad revenue totaling $117 billion, a 32% rise or $29 billion increase. The IAB attributed this to the creator economy, enhanced commerce integration, and improved targeting and measurement.
Digital video grew by 25%, reaching $78 billion, faster than the 19% growth in the previous year, indicating more ad spending attracted by video. Commerce media hit $63 billion, up 18%, while programmatic advertising increased by 20% to $162 billion.
In its 2026 outlook, IAB said creator advertising reached $37 billion in 2025, with projections of $44 billion in 2026, noting a move from campaign-based influencer marketing to continuous creator programs.
A note on the data: categories like social, search, video, display, and commerce media overlap in the $294 billion total, so a single ad, such as a social video ad, could be counted in multiple categories.
Why This Matters
The slowdown in search growth warrants attention alongside other recent indicators. Google’s Q4 2025 earnings reported a 17% increase in Search revenue, but this reflects just a single quarter for one company.
In contrast, the IAB data covers the entire year across a broad industry dataset, with growth rates falling from 15% to 11%, indicating the overall category is expanding more slowly than the competing channels vying for the same budgets. This doesn’t imply search is shrinking; it still generated $114 billion in revenue, even though social and video ads grew at a faster pace. Commerce media, at $63 billion, now accounts for over 20% of total digital ad revenue.
Looking Ahead
IAB will host a webinar on April 21 at 1 p.m. ET with experts from IAB, PwC, and Madison & Wall to discuss the findings.
