• The Future of Advertising: Digital Dominance, AI-Powered Strategies, and the Rise of CTV

  • Jan 8 2025
  • Length: 4 mins
  • Podcast

The Future of Advertising: Digital Dominance, AI-Powered Strategies, and the Rise of CTV

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  • Summary

  • The advertising industry is undergoing significant transformations driven by technological advancements, evolving consumer behaviors, and shifting market dynamics. Recent market movements indicate a robust growth trajectory, with global ad spend forecasted to increase by 5.9% in 2025, outpacing the global economy by 2.7 percentage points[1].

    Digital advertising continues to be the fastest-growing channel, projected to rise by 9.2% in 2025, capturing 62.7% of global ad spend. Retail media is leading the way with a 21.9% year-over-year growth, as advertisers capitalize on the high value of retailer consumer data and invest in offsite advertising, including connected TV[1].

    The rise of algorithmic strategies is reshaping media investments, with algorithmically enabled ad spend estimated to reach 79.0% of total ad spend by 2027. This shift is driven by the increasing use of AI-powered features in digital advertising, which sustain relevance amid the rise of social and retail search[1].

    The entertainment and media industry is also experiencing significant changes, with advertising accounting for 55% of total E&M industry growth over the coming five years. Internet advertising is projected to grow at a 6.7% CAGR through 2028, with retail/other display internet advertising revenue expected to rise at a CAGR of 21.6% to $31.7 billion in 2028[2].

    The advertising landscape is becoming increasingly complex, with advertisers seeking to diversify their spending and reach new audiences. Connected TV (CTV) is emerging as a key channel, with 83% of advertisers agreeing to shift their ad dollars to explore different channels/platforms in 2025[5].

    AI is playing a pivotal role in shaping the advertising industry, with 96% of advertisers saying AI will have a major/moderate impact on advertising and marketing. Agencies are seeking AI-driven solutions to reduce costs and increase the speed of output, with creative, insights, and optimization being the top tasks where advertisers will see the biggest impact from AI[5].

    In response to current challenges, industry leaders are focusing on providing advertisers with choices and controls to take back control of their advertising strategies. This includes the use of AI-enabled tools, contextual targeting, and creative alignment with content genres[5].

    Compared to the previous reporting period, the advertising industry is experiencing a significant shift towards digital and algorithmic strategies. The rise of CTV and retail media is driving growth, while AI is revolutionizing the way advertisers approach their strategies. As the industry continues to evolve, it is essential for advertisers to have the tools and controls they need to succeed in this complex landscape.

    Key statistics and data from the past week include:

    - Global ad spend forecasted to increase by 5.9% in 2025[1]
    - Digital advertising projected to rise by 9.2% in 2025[1]
    - Algorithmically enabled ad spend estimated to reach 79.0% of total ad spend by 2027[1]
    - Internet advertising projected to grow at a 6.7% CAGR through 2028[2]
    - 83% of advertisers agreeing to shift their ad dollars to explore different channels/platforms in 2025[5]
    - 96% of advertisers saying AI will have a major/moderate impact on advertising and marketing[5]

    Overall, the advertising industry is poised for significant transformation in 2025, driven by technological advancements, evolving consumer behaviors, and shifting market dynamics. As the industry continues to evolve, it is essential for advertisers to have the tools and controls they need to succeed in this complex landscape.
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