Advertising transformed: AI reshapes the industry

Already a powerful technology in Advertising, AI’s influence on the industry will only deepen from now on. As advertising and marketing agencies respond to waves of technological change, so AI’s continued rise will create some both major challenges and opportunities the industry must navigate.  

Key developments entering 2025 

GenAI tools are up to scratch

Collaboration between technology companies and traditional media has highlighted AI’s huge potential and maturity as a technology. With the power of GenAI models continuing to soar, more and more applications are emerging at higher and higher quality and lower and lower price points. Cases in point are Lionsgate’s partnership with Runway or OpenAI’s Sora release, a landmark development in showing how high-quality video content could be produced from textual descriptions.  

AI became increasingly integral to content and advertising throughout 2023-2024, particularly in enhancing content creation, enabling hyper-personalisation and increasing campaign ROI. For example, Headway, a Ukrainian EdTech company, has used GenAI to enhance ROI on video ads by approx 40%. In the UK ITV also released their first wholly AI-created advertisement.  

Going even further, Meta’s AI Sandbox is providing advertisers with tools to generate diverse ad variations, enabling more dynamic and adaptable multi-platform campaigns.  

Application at breakneck speed 

AI’s application in advertising has been meteoric.  Looking back to 2023, investment was commercially cautious, usage was mainly experimental, and live applications were limited. Fast forward to 2024 and AI had become an essential part of content creation, media planning, and targeting through hyper-personalisation.  

Because progress has been so rapid, many companies have been playing catch-up to readjust budgets and resources towards AI. Some significant financial commitments and bold strategic moves have been made, underscoring the industry’s clamour for AI to transform. For example, Publicis Groupe’s €300 million investment in its CoreAI strategy or WPP’s £250 million partnership with Google.  

Retaining focus on what can have real impact to clients or consumers, whilst keeping pace with developments and managing a tight envelope of investment and cost, will be a critical differentiator for the entire advertising ecosystem. We expect the pace of change to create friction and tension inside organisations less equipped in terms of leadership, structure and engagement on AI. 

Growing emphasis on responsible AI

Concerns continue to surround AI’s impact on the consumer and advertising industry, with the fear of job displacement and potential for brand impersonation or misinformation in AI-generated content prompting many questions about the ethical use and control of AI.  

A recent Baringa global survey found that whilst AI-generated content was more acceptable to consumers in advertising than in almost any other media (except for video games), many respondents continue to cite transparency and trust as key concerns for how AI influences their content and experience. Consumers are coming to expect brands to be responsible in their use and disclosures around AI, particularly in personalised content and representations of human experience.  

The focus for 2025 and beyond  

Upskilling for the AI era 

The shift towards AI-driven advertising requires a fundamental rethink of traditional advertising and marketing skillsets. Pivoting learning curricula to AI models and pursuing certifications on data analysis, AI tools and ethics are becoming increasingly differentiating for advertisers, agencies and marketers.  

AI ethical governance 

Emerging frameworks around transparency and accountability will shape how the industry deploys AI, be that on issues of ethics, copyright, data privacy or transparency and consumer protection. Agencies and brands should collaborate with regulators and industry bodies to establish best practices and controls which can build trust as well as drive innovation.  

Agency adaptation 

Agencies will be under increasing pressure to demonstrate their value and role in ROI, in a market increasingly shaped by technology and the large tech platforms. Dynamic commercial models may emerge as agencies strive to differentiate themselves, with continued consolidation in the industry also likely, as agencies seek to compete through scale and specialisation.

Discover more perspectives on key trends shaping TMT in 2025