My predictions for advertising in 2025 – I have two big strategic predictions for this year. These are the economy and AI. And I have a few smaller tactical predictions.
The big things
The economy is going to be the biggest thing that affects advertising this year. The new US government is likely to make changes that increase how much people and companies spend over the next year. This is going to increase advertising spend. This will increase media costs, increase competition for consumer attention, and will increase the value of highly creative work. Many brands and agencies will only notice this later in the year. Brands and agencies who get ahead of this will have an advantage – by being able to lock in costs before they increase, and by being ready with creative campaigns ahead of increased competition.
The second biggest is AI. AI got a strong hold of our imaginations over the last two years. The hype has faded slightly, but the work of integrating AI into industry continues. In advertising, the main effect of AI is that it reduces costs. Across the board. It reduces the cost of market research, strategy, ideation, creative development, expansion, adaptation, production, personalization and analytics. But because the set-up of the advertising game is a lot of brands chasing the same consumers, this does not mean that total advertising spend reduces. It means that advertisers compete to produce better advertising – so they can outbid their competitors for more expensive media slots. The effect will be like the move from advertising before computers to advertising after computers. Costs of each stage of the process fell – but total advertising spend increased by a lot.
Tactical predictions
These are smaller changes – which are opportunities for brands to get ahead of the competition.
Off-platform advertising – we are seeing smaller creators take direct ownership of their audiences through mediums like podcasts and newsletters. These formats don’t use traditional social media platforms. Social media platforms manage the advertising for creators who use them. For these off-platform formats, creators need to work directly with brands. The audiences of these creators are often valuable as they reach highly specialist groups – at a time when targeting on social media platforms is getting more difficult. As the number of these off-platform grows, and as managing smaller audiences becomes easier thanks to the help of AI for identifying and tracking performance, expect to see advertising on off-platform podcasts and newsletters grow this year.
Branded gaming advertising – AI is very quickly reducing the costs of making phone video games. Expect more brands to start making their own video games – where their branding is part of the video game. This is at a time when mobile gaming is getting more popular by the number of people playing and the number of hours they play. It covers many demographics – across ages, income and gender – depending on the type of game. Depending on the target audience, combining branded games with live-streaming campaigns on platforms like Twitch and YouTube, and communities on platforms like Discord can quickly magnify the ROI of these campaigns.
LLM Chatbot advertising – AI large language models (LLMs) are expensive to run and the market is competitive across firms like OpenAI (ChatGPT), Anthropic (Claude) and Google (Gemini). Expect some AI firms to start using paid advertising to help fund the costs of running customer queries to keep their products free for their customers. This may be very similar to Google’s advertising on search – where you get sponsored links in addition to the search results that Google’s algorithm found for you. So if you ask an LLM chatbot’s advice on how to pick the right new electric car to buy for yourself, you might get ads by car brands together with the answer. This could be a very powerful form of media for brands – as consumers will have high purchase intent for many questions.