The IAB's 2025 Internet Advertising Revenue Report landed this week, and the headline number is exactly what you'd expect: U.S. search ad revenue hit $114.2 billion, making it the largest single category in digital advertising. That's 38.8% of total digital ad spend. If you're running paid search, you're still operating in the most scaled performance channel in the market.
But here's the number that should actually change your next budget conversation: search grew 11% year-over-year. That's down from 15.9% in 2024. Meanwhile, social climbed 32.6% to $117.7 billion. Digital video jumped 25.4% to $78 billion. Programmatic rose 20.5% to $162.4 billion. Commerce media added 18% to reach $63.4 billion.
Search is still the biggest. It's no longer the fastest. And that distinction matters more than most CMOs are acknowledging in their planning cycles.
The Math Behind the Momentum Shift
Let me put this in terms your CFO will appreciate.
Total U.S. digital ad revenue reached $294.6 billion in 2025 – a 13.9% increase over 2024. The market added roughly $36 billion in new spend. Search captured about $11 billion of that. Social captured $29 billion. Video captured roughly $16 billion.
When you model where incremental dollars are flowing, search is getting a smaller share of the new money than its share of the existing base. That's not a crisis – it's a maturation signal. And mature channels require different operating assumptions than growth channels.
The IAB report notes that these gains came without the cyclical tailwinds that boosted 2024 – no Olympics, no FIFA World Cup, no U.S. election. The market grew anyway. But the growth concentrated in channels where automation, commerce integration, and creator-led content are more deeply embedded.
Why This Matters for Your Channel Mix Model
If you're still running your media mix model with search as the default performance anchor and everything else as "awareness support," you're working with outdated assumptions.
Here's what the 2025 data actually tells us about channel economics:
Social is now a transaction channel. At $117.7 billion, social slightly exceeded search in raw dollars. That's not because brands are chasing impressions – it's because social platforms have integrated commerce, creator content, and performance measurement into unified buying environments. When a channel can create demand, target prospects, retarget engaged users, and close the sale without forcing users to leave the platform, it competes directly with search for lower-funnel budget.
Video is no longer just brand. Digital video's 25.4% growth to $78 billion reflects a structural shift. Streaming platforms are investing in live sports and real-time events while expanding ad-supported tiers, creating more premium inventory that can be bought programmatically and measured against business outcomes. The old split between "brand channel" and "performance channel" is collapsing.
Commerce media is absorbing lower-funnel spend. At $63.4 billion, commerce media grew 18% by offering what search has always promised: high intent, measurable outcomes, and proximity to purchase. For brands selling through marketplaces, commerce media competes with search for the same business logic – and often wins because it sits even closer to the transaction.
Creator advertising is now a core media channel. The IAB reports that creator advertising spend reached $37 billion in 2025, with projections of $44 billion in 2026. What was once campaign-based influencer marketing is evolving into always-on creator programs with dedicated teams and purpose-built tools. That's not experimental budget – that's structural allocation.
The Concentration Problem You're Not Modeling
There's another signal in this report that deserves attention in your next board prep: market concentration is increasing.
The top 10 companies now control 84.1% of U.S. digital ad revenue, up from 80.8% a year ago. The structural advantages of scaled platforms – deeper first-party data, integrated commerce ecosystems, proprietary measurement infrastructure, end-to-end buying environments – are compounding.
For marketers, this creates a strategic tension. You need these platforms to reach audiences at scale. But your negotiating leverage is declining as concentration increases. And your ability to measure incrementality across platforms is getting harder, not easier, as each ecosystem optimizes for its own attribution logic.
This is why the IAB's Project Eidos initiative – focused on measurement standards and interoperability – matters more than most operators realize. Without shared measurement frameworks, you're comparing apples to algorithms.
What This Means for Your 2026 Planning
Let me be direct about the implications.
Search is not declining. It's not broken. It's not going away. A $114.2 billion market that grew 11% is still an essential performance channel for most B2B and B2C businesses. If you're cutting search budget because "AI is changing discovery," you're probably making a mistake.
But search is no longer the only place where outcome-focused spending makes sense. And if your planning process treats search as the default performance allocation with everything else fighting for incremental dollars, you're likely misallocating capital.
Here's what I'd recommend for your next planning cycle:
Reframe the question. Instead of "how much search budget do we need, and what's left for other channels," ask "where does demand get created and captured in our category, and how should budget follow that journey?"
Model incrementality, not attribution. Platform-reported attribution will always favor the platform. Run holdout tests. Build incrementality frameworks. Accept that you'll never have perfect measurement, but insist on directional confidence before reallocating significant budget.
Audit your channel assumptions. When was the last time you tested whether social or video could drive the same business outcomes as search at comparable efficiency? The 2025 data suggests many advertisers are finding exactly that – which is why those channels are growing faster.
Watch commerce media closely. If you sell through retail or marketplace channels, commerce media is likely competing with search for the same customer at a later stage of the journey. Model the interaction effects, not just the channel-level ROAS.
The Bottom Line
The 2025 IAB report confirms what operators have been sensing for the past eighteen months: the performance marketing stack is diversifying. Search remains the largest single category, but it's no longer capturing the majority of incremental investment. Social, video, commerce media, and creator channels are all growing faster because they're integrating discovery, persuasion, and conversion into unified environments.
For CMOs presenting to boards, the narrative needs to evolve. Search is still essential – but it's one node in a more distributed commercial system. The companies that will outperform in 2026 are the ones modeling that system accurately, not the ones defending last year's channel mix because it's familiar.
Model or it didn't happen. And right now, the model is telling us something different than it told us two years ago.
