2025 Ad Tech Predictions: A Changing Landscape for Digital Marketing
By Ken Harlan, Founder and CEO, MobileFuse
As we look ahead to 2025, the digital advertising industry is set to experience several transformative shifts. From industry giants like Google adapting to regulatory and business challenges, to sustainability becoming a self-regulated imperative, advertisers and marketers must prepare for a year of disruption.
Additionally, next year will present new opportunities to build trust, innovate digital marketing tactics and advance our industry’s effort to reduce negative climate impacts. Here’s a look at what the industry is poised to experience in the new year.
Google Will Shut Down Its Ad Exchange Business
Google's ad exchange, once a cornerstone of its advertising empire, is losing its grip. With eight consecutive quarters of declining revenue – most recently, ExchangeWire research found a 5.2% drop to $7.4 billion – Google's Network segment faces mounting pressure. Comparatively, YouTube's advertising revenue surged by 28% in the second quarter of 2024, highlighting a stark contrast in performance. Adding fuel to the fire, Google lost a pivotal antitrust case in 2024, intensifying scrutiny and creating a strategic imperative to focus on more profitable divisions. In addition, the ad exchange operates on lower margins than other parts of Google’s business. The Network division's decline aligns with broader industry trends, including increased competition from platforms like Amazon and TikTok, regulatory scrutiny, and evolving market dynamics.
It would be a logical move for Google to sunset its ad exchange business in 2025, and double down on higher-growth areas like YouTube and other content-driven platforms. This move would not only streamline its operations but also align with broader trends favoring CTV and platform-specific advertising. It’s time for marketers to diversify their approaches, if they haven't already.
YouTube Will Rule Connected TV (CTV)
YouTube is positioned to dominate the CTV space in 2025, leveraging its unmatched content diversity and advanced ad solutions. As younger viewers increasingly use YouTube on their TV screens, the platform has become a top streaming destination. Data from Neilson shows YouTube captures 8.1% of all TV screen traffic, outpacing Netflix (6.9%), Hulu (3.3%), and Prime Video (2.8%).
The platform’s hybrid model of creator-driven and premium content provides advertisers with unparalleled reach and flexibility. Additionally, innovations like shoppable ads and data-driven targeting amplify advertiser ROI, making YouTube a compelling alternative to traditional streaming platforms. Expect YouTube’s dominance in CTV to reshape ad budgets, with more marketers prioritizing the platform for its scale and precision.
Google’s Gemini AI Transforms Web Traffic into a Sinking Ship
Google’s pivot to AI-powered search with Gemini AI is rewriting the rules of web traffic. Historically the gateway to the internet, Google’s search results now prioritize delivering direct answers, reducing the need for users to click through to external websites. This paradigm shift challenges the open web's viability, pushing advertisers to rethink their strategies.
In 2025, expect a continued decline in web traffic driven by search, forcing brands to diversify their audience acquisition methods. We will see marketers investing more into in-app, digital out-of-home, and other formats that are upside down when it comes to timespent and ad dollar investments.
Sustainability: A Self-Regulated Priority
While U.S. federal focus on sustainability is expected to stagnate or regress in 2025, brands and agencies will take matters into their own hands. Self-regulation will become a competitive advantage, with companies emphasizing sustainability initiatives to stay ahead of future regulations and consumer expectations. We’ll likely see brands and advertisers lean towards working with partners that have sustainability and environmental impact as a priority.
Globally, sustainability remains a critical issue, with Europe and other regions leading the charge. Brands operating on an international scale will need to align with these expectations or risk losing relevance. Early adopters of robust sustainability practices will benefit from consumer trust, better brand perception, and long-term market positioning.
All that said, as we navigate these changes we can see a common thread: a need for adaptability. The advertising tech landscape is more complex, and increasingly volatile,, but with challenge comes opportunity. By understanding these predictions and taking proactive steps, brands and advertisers can position themselves for success in the new year ahead.
