Social Ads Just Passed Search by $3.5 Billion (and Budgets Are Lagging)
Social media ad revenue hit $117.7 billion in 2025, edging past search advertising at $114.2 billion for the first time in the IAB's annual revenue report. Search growth slowed from 15% YoY to 11%, while social posted 32.6% YoY growth, the largest gap between the two channels since the report began tracking them separately. Most 2026 paid budgets were modeled before either of those numbers was public.
The line that crossed
The IAB and PwC have published the Internet Advertising Revenue Report every year for thirty years. For most of those years, search has been the largest single category by revenue. In 2025 that flipped. Social pulled ahead by $3.5 billion, and the directional growth rates suggest the gap widens through 2026, not closes.
Some context on the slowdown. Search grew 11% YoY off a base of $103 billion. That is still a real number. But the 2024 print of the same report had search at +15% YoY. Four points of growth disappeared in twelve months on a $100 billion line. That is the part media buyers should be pricing in, not the level.
What is actually pulling the share
Social's 32.6% jump did not come from one platform. The IAB attributes it to three combined moves: scaling of the creator economy, deeper commerce integration in-platform, and what they call "performance improvements in targeting, measurement, and attribution." That last one is the polite way of saying social platforms have caught up on the conversion side that search held as a moat for fifteen years.
The creator number deserves a separate look. IAB pegs creator-driven ad spend at $37 billion in 2025, up 26% YoY, with projected growth to $44 billion in 2026. Almost half of creator ad buyers (48%) now classify creators as a "must buy," ranking them just behind paid search and social. Five years ago that number was in single digits.
Video grew 25.4% to $78 billion, accelerating from +19% the year before. Commerce media (Amazon Ads, Walmart Connect, the long tail of retail networks) grew 18% to $63.4 billion. Programmatic rose 20.5% to $162.4 billion. Search is the only channel of the major five that decelerated.
The 70/20/10 problem
I think most teams will read this report, mention it on a Monday call, and not change anything material. The reason is not laziness. It is that the dominant paid mix at growth-stage and mid-market companies is roughly 70% search, 20% social, 10% other, and that mix is wired into a year's worth of attribution models, account team comp, and quarterly forecasts.
Pulling 10 points off search to fund social is not a budget decision. It is an organizational rewrite. From what I have seen, the teams that moved early (2022 to 2023) usually had a single executive sponsor willing to absorb a soft quarter to clean the data. Teams that did not tend to discover the gap during a board review and try to close it in six weeks. That does not work for the same reason a search-to-demand-gen pivot does not work in one quarter: the test infrastructure is not there yet.
A specific quarter-by-quarter approach
If I were running this for a $1M monthly paid budget today (call it $700K search, $200K social, $100K other), here is what I would actually do over Q2 and Q3 of 2026.
This month: Pull the bottom 15% of search spend by ROAS, the campaigns that are already underperforming. That is roughly $105K. Move 60% of it ($63K) into Meta Advantage+ Shopping with proper conversion tracking, and 40% ($42K) into TikTok Spark Ads against your top three creator partners if you have them, or paid amplification of organic content if you do not. Do not touch top-of-funnel branded search. That number is not part of this conversation.
Next quarter: Run the same exercise again. If the social spend is hitting ROAS within 70% of the search ROAS you replaced, double the reallocation. If it is under 50%, your conversion infrastructure on social is not ready and the problem is not the channel.
Benchmark: Plan for social ROAS to be 60 to 80% of search ROAS in the first quarter post-reallocation. Anything closer than 80% and you should be moving faster. Anything under 50% and you have a tracking problem, not a channel problem.
That last point is worth dwelling on. A lot of the social-does-not-work conclusions I have read in the last 18 months are actually CAPI conversion gaps that nobody fixed, not real channel weakness. Meta's one-click CAPI rollout addresses some of this, but only if you actually turn it on.
Where the channel mix conversation actually lives
The directional shift the IAB just printed is also showing up in independent trade coverage. TV Tech's read on the report flags that every major digital channel except search posted accelerating growth in 2025, and the SEJ coverage that first surfaced this story calls the deceleration the most material data point in the report. Two outlets framing it the same way is rare. It usually means the underlying number is uncomfortable enough that nobody wants to soften it.
The thing nobody is saying out loud: the IAB number for "search" still includes a lot of retail media and AI Overview-driven results that did not exist as separate categories in 2020. Strip those out and the underlying Google text-ad number is probably growing closer to single digits, not 11%. We will not know the exact split until the next report breaks it out, but the directional risk is real, and Meta's pass of Google in ad revenue (covered here in March) was the early signal that the IAB just confirmed at the channel level.
What April 21 actually matters for
IAB and PwC are running a webinar on April 21 at 1 PM ET to walk through the methodology and answer questions (details here). The number worth listening for is whether they break out generative AI search ad revenue (Google AI Overviews, Perplexity, ChatGPT search) as a separate line. If they do, the search 11% number probably gets revised downward for organic search ads specifically, which is the part most performance teams actually buy.
If they do not break it out, you are going to see another twelve months of media partners using the headline number to defend search budgets that are quietly losing share to channels their internal sales teams are not quoted on.
That is the honest read. The numbers are public. The hard part is not seeing them. It is getting your finance team to model a different mix before the next quarterly review forces the conversation backwards.
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