In the first half of 2017, advertisers spent £699m on video ads – a 46% year-on-year rise – while spend on banner ads increased by just under 2% to £685m.
Video is now the fastest-growing ad format and now accounts for 35% of all spend going on display advertising.
"The time people spend watching online video has grown tremendously over the last few years, so it’s little wonder that video is now the fastest-growing ad format as advertisers look to tap into the changing way people consume content," IAB’s chief executive Jon Mew said.
In fact, the time spent watching short video clips has tripled over the last three years, from 51 minutes to two hours and 21 minutes per week, according to YouGov data.
Within video advertising, spend on outstream or social in-feed has nearly doubled and is now the most popular format, accounting for 52% of video spend (£363m), overtaking pre-and post-roll ads which account for 44% (£309m).
"There’s no doubt that video is digital’s most important and powerful format," Dave Counsell, digital trading director at the7stars, said. "It’s an extremely exciting time to witness the strong results video is providing for advertisers."
Display advertising as a whole grew 18% to £2bn, while search grew 15% to £2.8bn and classifieds remained flat at £692m.
Overall digital adspend, meanwhile, grew 13.8% to £5.56bn in the first half of 2017.
With half of UK internet time now being spent on smartphones, mobile’s share of digital adspend has risen from 35% to 43%, or £2.37bn. Mobile’s year-on-year growth was 38% and now accounts for 57% of all display adspend, 70% of video spend and 83% of social media spend.
Adspend on social media sites grew 42% to £1.05bn, accounting for over half (53%) of the display ad market.
"Historically, growth has been the major and constant theme about digital adspend. However, that’s only one indicator of the industry’s success, and as the IAB UK enters its 21st year, it’s about shifting focus to initiatives that will ensure the long-term sustainable health of the industry as it enters adulthood, and provide advertisers with the best possible environment," Mew concluded.