The state of video advertising: Tracking the evolution of video channels, targeting and technology for brands and agencies

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This State of the Industry report, produced in partnership with Perion, explores how brands and agencies leverage video advertising across channels and formats to engage relevant audiences.

The video advertising landscape is rapidly evolving, driven by changing consumer behaviors and new technology. It’s also becoming increasingly diverse and dynamic, offering agencies and brands numerous platforms and channels to reach their target audiences. 

In this new State of the Industry report, Digiday and Perion polled 128 brand and agency respondents to learn more about how they’re leveraging video advertising and optimizing their campaign performance. Marketers are leaning on video advertising to increase brand awareness and favorability, using it as a conduit to achieve ad relevance and audience targeting.

This report explores the channels and formats that video advertisers are gravitating to, as well as the steps they’re taking to reach their target audiences. With video advertising changing quickly as new channels and formats rise and fall out of favor, brand safety and ad fraud are also growing concerns among our respondents.

“One of the main hurdles for brands and agencies is managing campaigns across multiple platforms and formats, each with its own creative and measurement requirements,” said Todd Cohen, vp of video/CTV strategy and sales at Undertone by Perion. “Cross-platform campaigns demand coordination to ensure consistency while adapting to the nuances of each channel. 

“Additionally, ensuring brand safety, mitigating ad fraud and addressing privacy and targeting concerns are critical obstacles,” he said. “As video advertising becomes more complex and data-driven, measuring success and effectively using analytics also present significant challenges.”

01

Video ads are driving business outcomes

Video advertising has entrenched itself as a critical part of marketers’ toolkits. Ninety-eight percent of our respondents report that video advertising plays at least a “significant” role in their advertising mix, including 56% who describe its role as “very significant.

Brands and agencies are leveraging video advertising to pursue various goals, including increased brand awareness and favorability (74%).

Other goals brands and agencies hope to accomplish through video advertising include improved ad relevance and audience targeting (70%), comprehensive measurement and data insights (66%), attention (63%) and direct sales and higher conversion rates (62%).

Among our respondents, the majority are allocating at least 21% of their budgets to video advertising. In 2024, 58% of respondents are spending 21%–40% of their budgets on video advertising.

However, brands and agencies expect to increase their spending on video ads in 2025. While 54% expect to allocate 21%–40% of their 2025 budgets to video ads, 37% plan to spend at least 41% of their budgets on video ads — up from 11% in 2024.

Our survey echoes findings from IAB, which found that total digital video advertising spend, including CTV, social video and online video, is projected to grow 16% in 2024, nearly 80% faster than overall media ad spend.

According to Cohen, the rise of CTV and mobile video consumption, as well as the expansion of video offerings on social platforms have created more opportunities to engage highly targeted audiences, particularly younger demographics.

“Advances in programmatic video advertising, AI-driven targeting and improvements in creative formats are making campaigns more efficient and scalable,” Cohen explained. “As video continues to demonstrate strong business outcomes, from brand awareness to direct sales, more advertisers are planning to allocate larger portions of their budgets to video, especially in premium environments.”

Similarly, many brands and agencies predict the revenue generated by video advertising to grow in 2025.

Next year, 39% of respondents forecast at least 41% of their revenue will be generated by video advertising, up from 7% in 2024. About one-tenth of respondents are unsure what to expect as far as video advertising’s impact on revenue.

03

Platforms and channels

Social is the dominant video ad channel among our respondents, edging out channels like display and mobile.

Eighty-two percent of the brands and agencies surveyed serve video ads on social, followed by display (76%) and mobile/in-app (72%) video formats. More than half also serve video ads on CTV (61%) and retail media networks (58%).

Mobile and in-app video ads are an area primed for growth, particularly as advertising spend in mobile games continues to climb. For instance, gaming platform Roblox expanded its video ad offerings earlier this year, giving advertisers new opportunities to reach an engaged consumer set. Video formats, including rewarded video ads and interstitial videos, are among the most popular in-game ad types due to their effectiveness in driving engagement and providing a positive user experience. 

Taking a closer look at video ad placements on social media or video-sharing platforms, a nuanced picture emerges that captures the parity and diversity of the digital ecosystem.

At least 80% of respondents are running video ads on Instagram (89%), Facebook (88%) and YouTube (88%). More than half are also using video ads on TikTok (78%) and LinkedIn (66%). Less than a quarter run video ads on Twitch (24%), Snapchat (20%) and Pinterest (16%).

Video ad spending on streaming services and CTV platforms is similarly varied, with at least 60% of respondents serving video ads on Amazon Fire TV (66%), Hulu (63%) and Apple TV (60%). 

Other subscription services drawing in advertising dollars include YouTube TV (52%), Disney+ (47%) and Netflix (41%). Free ad-supported streaming television channels and platforms are commanding video ad dollars as well, including Roku (41%), Tubi (28%) and Pluto (25%).

Our respondents also report serving video ads on Peacock, Max and broadcast video on demand. They also use other ad platforms, including iHeart and Samsung Ads, to run video ads on streaming TV, in addition to buying placements through programmatic means.

“Subscription streaming services like Hulu, Disney+ and Netflix offer premium content environments, which align well with brand safety concerns and the desire for higher-quality engagements,” Cohen said. “However, they also provide a perceived quality of content and original programming which may sway ad spend.

“Meanwhile, the flexibility and audience size of FAST channels are increasingly attractive to advertisers, offering a more budget-friendly alternative without compromising reach,” he added. “We are starting to see these channels capture more ad spend across the board, and we can expect that to continue.”

04

Platform selection and media buying approaches

With so many platforms available for video advertising, brands and agencies are weighing different factors when deciding where to serve ads.

The leading factor among our respondents is cost and budget (73%), closely followed by ad formats and creative options (71%). Other significant considerations include reach and audience size (68%), measurement and analytics (61%) and ROI/ROAS (52%).

While video ad formats are one of the leading determining factors for teams, video ads that are well-integrated into the user experience are most popular among the brands and agencies surveyed.
More than three-quarters of our respondents are using in-stream video ads (77%), ahead of in-app video ads (73%) and in-feed video ads (73%). Seventy percent are using short-form vertical video ads, such as sponsored Instagram Stories. Less widely used video ad formats include interactive/shoppable ads (47%), pre-roll/mid-roll/post-roll ads (46%) and bumper ads (28%).

As reported by Digiday, CTV platforms are also introducing non-traditional streaming ad formats. For instance, Roku and Vizio are adding video ads to their respective CTV platforms’ home screens, while Samsung is rolling out an interactive ad format to replace the traditional interstitial ad break.

Taking into account the wealth of options — both in platform and format — available for video advertising, it is perhaps unsurprising that media buyers are using both direct-sold and programmatic approaches to book placements.

Nearly half of our brand and agency respondents (46%) are using direct-sold and programmatic buys equally. About one-third (33%) are primarily using programmatic buys, while 21% lean toward direct-sold.

“Direct-sold buys offer premium inventory with guaranteed placements, ensuring brand safety and context control. Programmatic buys provide scale and precise targeting, optimizing reach across diverse audience segments,” Cohen said. “However, a balanced approach is best where advertisers drive better outcomes by combining direct-sold and programmatic buys.”

As Cohen explained, teams may focus on direct buys for quality, premium inventory while supplementing with programmatic buys for targeting and reach. 

Media companies have taken note of this dynamic as well. For instance, NBCU and Warner Bros. Discovery made Olympics ad inventory on the Peacock streaming platform and the Eurosport website and supporting apps available to buy in private marketplaces (PMP for programmatic advertisers).

05

Data and targeting tactics

Video advertising on performance channels like social media and CTV has allowed brands and agencies to refine their targeting strategies beyond what is available through linear TV.

First-party data is the standard among our respondents, with 83% using it to ensure they reach their target audiences. Platform-specific data (76%) and third-party data (68%) are also widely used to refine video ad targeting.

This treasure trove of data widely supports marketers in deploying more effective video campaigns.

Advertisers are finding success in leveraging different data types for more effective video campaigns. As reported by Digiday, a recent study testing ads with pre-roll video on mobile webpages found that combining first-party and third-party data allowed brands to reach wider audiences and reduce costs.

Similarly, our respondents primarily rely on interest-based targeting (81%) — consisting of various data types and sources — to reach relevant audiences. Other video ad targeting tactics popular among our respondents include audience segmentation (69%), custom audiences (63%), contextual targeting (60%) and cross-device targeting (56%).

“Advertisers should adopt a layered approach when using data for video campaigns. First-party data should be prioritized for accuracy, platform-specific data should be used to tailor campaigns and advertisers should leverage third-party data for broader reach,” Cohen recommended. “Additionally, layering in contextual and interest-based targeting can enhance ad relevance, while retargeting helps improve conversion rates.”

06

Team structures and technology

With video advertising encompassing so many functions, it stands to reason several teams and departments are involved in different aspects of the process.

Among our respondents, 37% have a hybrid of in-house performance and brand marketing teams primarily responsible for video advertising.

A third of respondents have a mix of in-house and external teams or agencies responsible for video ads, with those specific teams in charge of performance marketing (14%), brand marketing (13%) or both performance and brand marketing (6%). Only 11% of respondents primarily rely exclusively on external teams or agencies.

“Brands benefit from the expertise and creativity of external agencies while retaining control over strategy and data with in-house teams,” Cohen said. “This collaboration fosters more dynamic campaigns and allows brands to scale quickly, experiment with new formats and optimize across platforms more efficiently.”

To streamline and manage their responsibilities, many teams and departments involved with video advertising are also incorporating artificial intelligence and machine learning into their workflows. 

The leading use of AI and ML among our respondents is optimizing video ad campaigns, either during or after campaigns (73%).

Optimization just edges out the use of AI for generating campaign creative (71%) and testing video campaigns (70%). Only 10% of our respondents do not use AI or ML in their video ad campaigns.

07

Measurement and optimization

Reflecting our respondents’ inclination toward leveraging video advertising as a brand awareness play, our findings reveal that teams are primarily emphasizing upper-funnel metrics when measuring the performance and outcomes of their campaigns.

Three-quarters of our brand and agency respondents cited audience reach and frequency as the most significant metrics for measuring video ad performance. Other significant KPIs include brand favorability and consideration (68%), ROI/ROAS (58%), brand awareness and recall (56%) and brand safety and suitability (54%).

With these success metrics in mind, 71% of our respondents reported that short-form vertical videos — popular on platforms like TikTok and Instagram — are the video ad format that performs the best. Other high-performing ad formats among our respondents include in-stream ads (64%) and in-app video ads (59%).

“For brand awareness, short-form vertical videos on platforms like TikTok and Instagram capture attention quickly, while CTV ads are highly effective due to their larger screen, non-skippable nature and sound-on experience,” Cohen said. “When it comes to conversions, social platforms generally perform better, with longer formats like in-stream ads on YouTube or pre-roll/mid-roll ads on CTV providing more time for messaging. Many advertisers strategically use these formats together, leveraging shoppable and interactive ads to drive immediate sales and engagement across the funnel.”

To further drive performance, teams are using different tactics to optimize their video ads. Nearly three-quarters of our brand and agency respondents (73%) are using brand safety monitoring to optimize the performance of their video advertising campaigns.

As part of their optimization strategies, teams are also prioritizing the creation of high-quality, engaging content (66%) and influencer collaborations (66%). Platform optimization (59%), artificial intelligence/machine learning (56%) and programmatic advertising (50%) are other popular optimization tactics among our respondents.

“Advertisers should shift focus from traditional metrics like completion rates and viewability to more meaningful ones like ROI/ROAS, brand safety and audience engagement,” Cohen recommended. “Attention measurement, which tracks how long viewers stay engaged with an ad, is gaining importance over simple impression counts. Metrics like click-through rates, interaction time, attention and recall now provide a more comprehensive view of ad performance and resonance.”

08

Challenges and opportunities

While video ad spending continues to climb, challenges remain as the industry changes at a rapid pace.

The chief challenge among our respondents is content creation (67%), just edging out brand safety/suitability (66%). This reflects our respondents’ emphasis on brand safety monitoring and engaging content as a means of optimization. 

Our respondents also face challenges around audience reach and ad placements, including ad fraud/viewability issues (50%), ad blocking (46%) and targeting/privacy concerns (46%).

Diving deeper into these challenges, 92% of respondents described brand safety as at least a “moderately significant” concern, including 73% who described it as a “very significant” concern. In regards to ad fraud, 87% described it as at least a “moderately significant” concern.

“Brand safety and ad fraud can significantly undermine video ad campaigns. Ads placed alongside unsafe content can damage a brand’s reputation, while ad fraud — like fake impressions or bot clicks — inflates costs and distorts performance metrics, leading to wasted budget and inaccurate ROI assessment,” Cohen said. “To safeguard campaigns, many advertisers are adopting stronger verification tools and working with trusted platforms.”

For instance, while AI and ML may exacerbate marketers’ concerns about brand safety and ad fraud, The Wall Street Journal reports that organizations are also developing AI tools to analyze digital data more quickly and accurately to help address brand safety and ad fraud issues.

As for what comes next, our respondents are looking at technology and emerging platforms as areas of opportunity in video advertising.

About seven in 10 of our respondents (69%) cited artificial intelligence/machine learning integration as the area of greatest opportunity for their organization. 

Other leading areas of opportunity include social commerce integration (65%), short-form video content (62%), augmented reality/virtual reality ads (52%), cross-platform campaigns (51%) and programmatic video ads (51%).

“In 2025, video advertising will be more automated through AI-driven optimization, with greater use of shoppable and innovative video formats. Cross-platform campaigns across CTV, mobile and social will become the norm, blending brand awareness with performance strategies,” Perion’s Cohen said. “Additionally, social commerce will grow, integrating shopping features into video ads, and we’ll see more personalized experiences through voice and audio integration, especially as CTV and smart devices gain popularity.”

To unlock these opportunities, brands and agencies are turning to partners that allow them to access innovative ad formats, advanced targeting and measurement capabilities and premium inventory. As video advertising becomes more sophisticated and dynamic, partners and platforms that are cost-effective, have wide reach and are able to integrate with other martech will be critical.

“Partners with strong brand safety measures, ad fraud prevention and transparency in performance reporting are essential,” Cohen said. “Additionally, solutions offering dynamic creative optimization and cross-platform management, along with proven outcomes like ROAS and engagement rates, are particularly valuable.”

As consumer preferences shift and new channels emerge, video advertising will remain a cornerstone of brand strategies, driving awareness and conversions. Success in this dynamic environment will depend on the ability of brands and agencies to balance creativity, technology and data-driven insights to meet evolving audience expectations and achieve higher engagement and ROI.

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