The Interactive Advertising Bureau (IAB), the US trade association for digital advertising, published its annual video ad spend report in July 2026. Two lines in it are worth reading together.
AI is now standard
Nearly two in three video ad buyers now use generative AI for their creative, up from half in 2025. According to IAB, one third of video ads produced in 2026 will include generative AI, and that share is expected to reach 43% in 2027. US digital video ad volume has doubled in five years.
In other words, the question “will advertisers use AI for video” is settled. The useful question is now: how.
Share of video ads that include generative AI
United States, per IAB
| Item | Value |
|---|---|
| 2026 | one third |
| 2027 (forecast) | 43% |
Small advertisers are not satisfied
This is the line that matters for a smaller business. Among small buyers, 96% say they are not satisfied with their current level of generative AI use for ad production. More than four in ten say they need more proof of performance and easier integrations.
That is not a rejection of AI. It is the finding that a tool with no method around it does not deliver the expected result.
The perception gap
Another IAB report, published in January 2026, shows the problem from a different angle. 82% of advertising executives believe consumers feel positive about AI-made ads. Only 45% of consumers actually do. And fewer than half of advertisers say they “always” disclose their use of AI.
Advertisers overestimate how audiences feel
Positive perception of AI-made ads
| Item | Value |
|---|---|
| What ad executives believe | 82% |
| What consumers say | 45% |
Put the two reports together: advertisers produce more with AI, overestimate how the audience receives it, and the smaller ones do not see the return. That is not a coincidence. If you believe the audience likes AI, you have no reason to raise the quality bar.
What it means for a smaller business
These are US figures, and every market has its own realities. But the mechanism is the same. Three decisions change the outcome.
Start with one measurable use. Not “doing AI video”, but one specific ad with one specific goal: quote requests, bookings, calls. One main video and its cutdowns, not a flood of content.
Define the proof before producing. The first barrier cited is lack of proof of performance. Pick the metric before production starts: cost per lead, click-through rate, bookings. Compare it with what you already do.
Aim for a video that does not look like AI. The gap between 82% and 45% says the audience judges more harshly than advertisers think. Every visible flaw costs trust. The six tells viewers spot.
Big brands have already built AI in. A smaller business’s advantage is not getting there first. It is using it with a method that pays.
Sources
Gabriel Brien
Founder of Crimson Spark Agency. AI filmmaker and creative technologist, writing from running this work daily.
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