State of Digital Advertising Report

Challenges and Opportunities in 2025

The Advancement of AI on Search Platforms

Even if you’re not an SEO marketer, you’ve probably heard the news: HubSpot, once a pioneer in SEO, has seen an 80% drop in its blog’s organic traffic over the past year. Once considered the gold standard in SEO strategy, Hubspot’s blog traffic decline marks a significant shift in the search landscape. Other industry leaders, like NeilPatel.com and WordStream.com, also experienced major losses in organic traffic in 2024.

So, what’s driving these massive organic traffic losses? The advancement of AI.

While the use of AI in search engines is nothing new, recent AI advancements have sparked an evolution in search engine and web user behavior. One example is Google’s strategy to use AI to enhance its search algorithms, which are now equipped to distinguish “good” content that reflects real expertise from “average” click-driving content. The marriage of generative AI and search allows search platforms, such as Google’s AI Overview, OpenAI’s ChatGPT, and Perplexity.ai, to answer user questions directly on the platforms.

As a result, these AI-driven search advancements are making it more difficult for marketers to acquire organic web traffic. This impact is more profound at the top of the marketing funnel, where marketers use awareness-driving tactics to drive clicks on search results. All brands need to closely monitor website search performance to understand how different content types and topics perform on various search platforms — and then optimize their strategies accordingly.

To maintain and grow brand awareness amid these changes, marketers must take a customer-centric approach by integrating both organic and paid strategies. Paid media, in particular, offers a key advantage: more precise audience targeting than organic channels. Whether through demographic, interest-based, lookalike, or contextual targeting, advertising campaigns allow marketers to reach the right audience with greater accuracy.

Marketing leaders who forge a strong partnership between their paid and organic teams will be better prepared to navigate the changes in search.

The Growth of CTV

According to eMarketer, connected TV (CTV) is the fastest growing major ad channel in the U.S. CTV ad spend is projected to grow 13.3% to over $32.5 billion in 2025, about 10% of total digital advertising spending.

According to an AdRoll January 2025 customer survey, 58% of respondents indicated they are not currently using CTV. However, this response is significantly less than the 80% who reported not using CTV in last year’s survey. Most importantly, 22% of respondents plan to increase CTV ad spending in 2025, compared to 0% in 2024.

What is driving the growth of CTV? It combines the high attention levels of traditional TV with the precise targeting and cost-effectiveness of programmatic media. According to a research conducted by Yahoo, CTV commercials delivered an average of 9.7 active attention seconds, about eight times more than mobile ads and 16 times more than desktop ads.

While CTV is used primarily for generating top-of-funnel brand awareness, it can also be effective in middle- or bottom-of-funnel campaigns, such as retargeting. The success of CTV campaigns hinges on their synergy with other marketing channels. 79% of people use another device while watching TV, which means targeting audiences across multiple screens and channels enhances the effectiveness of CTV advertising.

Regardless of industry, we recommend marketers seriously consider investing in CTV in 2025, not as an isolated channel, but as part of a cross-channel and full-funnel marketing strategy.

Third-Party Cookie Consent Rollout in Google’s Chrome Browser

In January 2025, Google announced their third-party cookie consent function in Chrome will be implemented via a “one-time global prompt.” While there is little detail about the timing of the rollout and how this consent function will work, we can draw insights from a similar feature to gauge its potential impact.

When Apple rolled out its App Tracking Transparency (ATT) prompt for iOS devices in 2021, only 20% of iOS users agreed to being tracked. This statistic stabilized at 40%-50% in 2022. Drawing insights from ATT (although third-party cookies will still exist), cookie-based addressable Chrome users could drop more than 50% overnight. As a result, advertising campaigns that rely solely on third-party-cookie-based targeting could see negative performance impacts.

While there are alternatives to cookie-based targeting, the bad news is there is no one-size-fits-all solution to replace third-party cookies. The future of digital advertising will rely on a conglomeration of targeting strategies, including zero- and first-party data collection, contextual targeting, universal IDs, and Google’s Privacy Sandbox APIs. We recommend marketers start experimenting with various alternatives now to prepare for the impending Chrome cookie consent rollout.