The AI Revolution: Why Your Ad Spend is About to Get a Whole Lot Smarter

Let's be honest, the advertising landscape is changing faster than ever. What worked yesterday might not even exist tomorrow. But amidst all the buzz and disruption, there's a clear signal emerging: AI isn't just a tool; it's the engine driving unprecedented growth and fundamentally reshaping how brands connect with consumers. 

We're always looking ahead, and our latest "This Year, Next Year" forecast is your roadmap to what's next. As Kate Scott-Dawkins, Global President of Business Intelligence, reminds us in the recent client webinar, "All of this together points to an evolution within our industry." It's not just about adapting; it's about thriving in this new era of intelligence beyond design. 

The AI Boom: Beyond Just "Efficiency" 

Forget everything you thought you knew about AI in marketing. This isn't just about shaving a few dollars off a campaign. We're talking about a massive, multi-faceted transformation that's supercharging global ad spend. Our forecast? A projected 8.8% growth for 2025, with the U.S. market leading the charge at a remarkable 12.5% in 2025 alone. 

This surge is fueled by what we're calling the "AI boom," and it's happening in three big ways: 

• Massive Investment: AI isn't just a buzzword; it's attracting colossal investments that are boosting GDP and creating a wave of optimism across the entire advertising ecosystem. 

• Reinvested Savings: Brands are finding incredible efficiencies with AI – from product development to logistics – and they're wisely reinvesting those savings directly back into media. Smarter spending, smarter growth! 

• New Market Players: A whole new breed of "AI endemic companies" is emerging, selling AI-derived products and services. These B2C and B2B innovators are jumping into the advertising arena, adding even more fuel to the fire. 

As Kate wisely put it, "We're sort of just over the inflection point where we're going to see more and more of those proof points coming through" regarding AI's impact on productivity. This is where intelligence truly becomes impact, putting the power of prediction in your hands. 

Your New Map: Navigating the Advertising Ecosystem 

To truly understand where those ad dollars are flowing and how to make them work harder, we've completely revamped our advertising taxonomy. It's a fresh perspective that helps us move at the speed of behavior, not the speed of identity. 

These aren't just categories; they're lenses through which to view the modern consumer journey: 

1. Content (58% of total media): Think social media, the open web, TV (both linear and streaming), newspapers, and audio. And for the first time, gaming is illuminated as a discrete channel, projected to hit $10 billion next year. 

2. Intelligence (21%): This is where search lives, rapidly evolving with AI. 

3. Commerce: (16%) This channel is all about retail media networks, travel platforms, and financial services media. 

4. Location: (5%) Covering traditional and digital out-of-home, and cinema. 

Intelligence: The Proactive Power of AI Search 

The "Intelligence" channel is undergoing a profound transformation. Remember when search was just about reacting to a query? Not anymore. AI is turning traditional search into a proactive, "agentic" experience. Imagine consumers engaging with AI chatbots that anticipate needs and offer recommendations – that's the future. 

In this brave new world, "Brand salience is even more important." Brands need to be more than just discoverable; they need to be trusted sources of information, woven into the very fabric of these AI-powered conversations. While this opens up incredible opportunities, it also means rethinking how publishers generate revenue, a challenge we're actively exploring. 

Commerce: Retail Media Surpasses TV 

Get ready for a mind-blowing shift: the "Commerce" channel is exploding. Retail media networks are no longer just for traditional retailers. They're for "anyone that has consumer data that they can monetize."  

As Global Chief Client Officer, Adam Gerhart, pointed out, "Retail media networks in particular are going to overtake TV in terms of in terms of ad revenue, and that's linear and streaming combined." This isn't just a trend; it's a massive opportunity to turn every channel, surface, and signal into a smarter opportunity to engage, connect, and grow. 

The Shifting Landscape: Adapt or Be Left Behind 

The forecast paints a clear picture of ongoing consolidation across media and commerce. Companies are seeking scale and efficiency to keep pace. As Kate noted, this "is absolutely a trend we expect to continue into next year." To thrive, advertising itself is evolving to be increasingly personalized, pervasive, and proactive. 

At WPP Media, we've developed a new Advertising Intelligence Framework to help you navigate this. It outlines five critical capabilities for future partners: robust data assets, advanced AI and tech capabilities, strong distribution networks, effective transaction capabilities, and compelling content and media for engagement. It's all about focusing on the why, not the who, to truly unlock impact. 

Your Future, Powered by Growth Intelligence 

The advertising world isn't just changing; it's being reinvented by AI. This demands a new approach, one that moves beyond static IDs and embraces the dynamic, predictive power of AI. WPP Media is at the forefront of this transformation, helping clients navigate these shifts with Growth Intelligence. 

As Adam so perfectly summarized the value of our work, "I love This Year, Next Year because it provides not only a glimpse into what's been happening, but also where things are going."  

We're here to help you turn every channel, surface, and signal into a smarter opportunity to engage, connect, and grow, ensuring your strategies are not just responsive, but truly predictive, driving measurable business impact in this exciting new era.