Why are brands pushing play on the video ad boom?

In an age where attention spans are shrinking, and smartphones have become the primary screen for millions, online video advertisements are experiencing unprecedented growth. Whether it’s short-form videos, live streams, or interactive video experiences, brands are leveraging these formats to break through the noise.

According to the Dentsu-e4m report, online video advertising is projected to grow at an impressive rate of 27.60%, reaching a 30% market share by the end of 2025. The report further highlighted a robust compound annual growth rate (CAGR) of 23.24% through 2026, surpassing social media (CAGR 20.22%) and paid search (CAGR 16.85%).

Industry experts believe that categories such as e-commerce, fast-moving consumer goods (FMCG), consumer packaged goods (CPG), automotive, retail & entertainment invest heavily in online video ads.

Gaurav Jain, Chief Business Office, ShareChat & Moj, stated that short video advertising drives success across all categories, prioritising high consumer engagement and visual appeal. He said, “The biggest spenders on online video advertising are industries like FMCG, beauty and personal care, and electronics. These categories leverage digital video to drive awareness and influence purchase decisions, especially in a market where short-form video (SFV) is becoming the dominant content format.”

Brand strategies for video advertising

Brands are increasingly turning to video ads to captivate audiences who have transitioned to a mobile-first consumption habit.

Akhil Almeida, Head-Marketing, Bandhan Life, noted a massive leap from static, text-heavy ads to immersive, snackable video content. He explained, “If you don’t hook your audience in those first few seconds, you’ve lost them for good. So we’re trading longer-form TVCs for short, playful narratives. Video advertising is not about chasing a shiny new format; it’s about meeting people where they are and giving them a reason to care.”

Sahil Sachdeva, Senior Manager Digital Marketing at Haleon, further highlighted that in the FMCG industry, approximately 80% of digital budgets are allocated to video advertising.

He said, “Video advertising has evolved significantly in marketing, especially digital marketing. Short form Video advertising now prioritises short-form content (Reels, Shorts) for engagement. AI-driven personalisation tailors messaging, while shoppable and interactive videos boost conversions. Long-form videos via Influencers, KOL's,

OTT's strengthen storytelling, driving trust.” Sachdeva further added that while paid media remains vital, organic & educational content builds consumer relationships. Thus, the focus is on blending education, engagement, and commerce to match evolving consumer behaviour.

What’s fueling the growth?

The rapid growth of the online video advertising market is driven by advertisers shifting their budgets toward video ads on platforms like TikTok, Instagram Reels, and YouTube Shorts to maximise audience engagement.

These platforms provide advertisers with a greater reach and the ability to target their audiences effectively. “With AI and data analytics, advertisers can now target specific audiences with precision, ensuring their video ads reach the most relevant consumers,” said Prashant Ray, Director of Marketing for Asia, Channel Factory.

He added that the rise of interactive videos, live streaming, and shoppable video ads enabled brands to engage with consumers in real-time, creating more immersive experiences. These innovations have been key drivers of the growing popularity of online video advertising.

This was reiterated by Gopa Kumar Menon, Chief Growth Officer - APAC, who said that the increasing costeffectiveness of video production, coupled with the ability to repurpose content across different platforms, has made video ads a viable option for businesses of all sizes.

Jain suggested that another driving factor is the seamless integration of video ads into social and peer-to-peer sharing ecosystems. He said, “ShareChat alone sees over 2 billion pieces of content shared to WhatsApp every month, creating organic virality and extending brand reach beyond paid placements. This behavioural shift underscores the power of user-driven amplification in enhancing ad effectiveness.”

Emotional connection

Shradha Agarwal, Founder & CEO - Grapes Worldwide, further highlighted the format’s capability of evoking emotions, which may have contributed to its rise. “Online video advertising comes with a captivating format that weaves a compelling narrative to evoke emotions and create a lasting impact for the viewers. Moreover, it enhances engagement with the audience by leveraging both audio and visual entities. This, in turn, goes a long way in intriguing the interest of the audience and establishing connectivity at a much deeper level.”

Kruthika Ravindran, Director- Key Accounts, TheSmallBigIdea, also highlighted the same and said, “The biggest reason video ads are so effective is simply that video is incredibly engaging. It lets brands tell stories that resonate with people on an emotional level, and that kind of connection is invaluable for marketers.”

Almeida also highlighted the increased ROI from video ads. According to him, video advertising consistently outperforms other channels in both engagement and impact.

He added, “It’s not just about clicks and watch time; it’s about forging a deeper emotional connection—especially important in a trust-based category like life insurance. Static images and text are still highly relevant when used in the right context. But they can’t compete with the immediacy of a well-crafted video. With advanced targeting tools, we can monitor performance in real-time and refine our messaging on the fly. In short, it’s more than just solid awareness—it’s long-term brand love.”

Regional expansion

The shift towards online video advertising is also fueled by the rise of regional content. Platforms now offer a dedicated space for ads tailored to regional audiences, ensuring broader reach and deeper engagement.

According to Sudarshan Sudevan, ECD, Saatchi Propagate, the increasing popularity of regional content via these platforms and regional OTT platforms has expanded the scope of video advertising.

Jain further said that Influencer marketing has also played a crucial role with brands increasingly partnering with micro and nano influencers, whose hyper-engaged communities drive authentic interactions. He added, “nearly 47% of influencer campaigns now focus on these creators, leading to stronger audience trust and higher ROI compared to traditional advertising models.

Trends to watch in 2025

Experts predict that shoppable and interactive video ads will likely gain more popularity this year as audiences continue to engage with them in larger numbers.

Menon explained the allure of these formats, “Interactive video ads, which allow viewers to engage directly with the ad content, are gaining traction. Personalised video ads, tailored to individual viewer preferences, are becoming more sophisticated. The integration of AR/VR elements into video ads is creating immersive experiences. Shoppable video ads, enabling viewers to purchase products directly from the video, are streamlining the customer journey.”

He said, “And, of course, we'll likely see further innovation in short-form video formats and live stream advertising, particularly with the continued rise of influencer marketing. The focus will be on creating authentic and engaging experiences that resonate with viewers.”

Jain highlighted the rise of live commerce and stated, “One of the biggest trends is the rise of live commerce, which allows brands to sell products directly through interactive video content. The global live commerce market, valued at $11.58 billion in 2023, is projected to grow at a 32% CAGR from 2024 to 2030. This indicates a shift
toward more real-time, interactive shopping experiences, where consumers can engage with brands and influencers before making purchase decisions.”

This year, we can also witness a rise in regional language content. Jain explained that with 86% of Indian users preferring content in their native language, advertisers are increasingly prioritising language-first strategies.

Platforms like ShareChat and Moj provide hyper-localised solutions, helping brands connect with audiences in Tier 2 and 3 cities. This shift is not only driving better engagement but also improving campaign effectiveness.

Some other trends to look out for are AI-integrated video ads. Sudevan explained the same with an example, “The integration of AI, say, for example, as an AI-generated influencer, or as an emotion-based targeting ad, is all possible in this rapidly evolving landscape. Engagement via gamification or immersive story-driven short formats along with personalised content will also rise this year.”

Meanwhile, Agarwal also noted a rise in demand for brands to stay visible through CTV and OTT platforms. “With the surging demand for CTV and OTT platforms, brands will be on the lookout for the integration of video ads into the channels for optimal visibility and reach.

Will online video ads continue their momentum?

Industry experts agree that online video advertising is set for sustained growth, driven by evolving consumer behaviour and technological advancements.

Sachdeva highlighted the role of faster internet and emerging AR/VR technologies in enhancing video effectiveness. He noted, “As attention spans shorten, brands will invest in dynamic, high-performing video strategies to stay relevant.”

Agarwal further emphasised video’s ability to drive higher engagement and conversion rates. She pointed out that with better click-through rates than static ads, video will continue to dominate digital advertising. Therefore, coming with a host of benefits, the demand for video advertising is only expected to surge in the future, opening the doors for more sophistication and upgradation of the ads.

According to Ray, to address growing concerns around brand safety, more advertisers will focus on premium video formats. He added, “Advertisers will focus on premium formats such as in-stream ads, which are carefully vetted to ensure brand integrity and targeted reach.”

Meanwhile, Jain reinforced the shift toward video-led, interactive campaigns. He highlighted the surge in spending on Indian short-form video (SFV) platforms, predicting significant revenue growth and deeper consumer engagement. “The future of advertising is video-led, interactive, and regionally immersive. Indian SFV platforms are proving lucrative for advertisers, generating $90-100 million in FY24. This figure is poised to surge, with SFV advertising revenue projected to reach $3-6 billion by FY30.”

He further added that live and interactive features will also play a crucial role in shaping the future of online video advertising. Brands are increasingly recognising the value of investing in live commerce and real-time product interactions to enhance consumer engagement. As consumers continue to engage with short-form videos and interactive content, brands will prioritise storytelling that resonates on a personal and cultural level.

Sudevan concluded, “Brands that don’t embrace video-first strategies will struggle to stay relevant. In the past 3 years, spending has grown by approximately 25% year-on-year, and the trend will continue in the years to come."

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