Programmatic Advertising Trends to Watch in 2025
In the fast-paced world of digital advertising, programmatic advertising has emerged as a game-changer, revolutionizing the way brands connect with their target audiences. Programmatic advertising, in simple terms, is the use of automated technology for buying and selling digital ad space. As we step into 2025, the programmatic landscape is set to witness several exciting trends that will shape the future of advertising. In this blog post, we'll explore the key trends that advertisers, publishers, and industry practitioners should keep an eye on.
1. The Continued Ascent of AI and Machine Learning
Artificial Intelligence (AI) and Machine Learning (ML), which is a subset of AI where machines learn from data without being explicitly programmed, have been driving forces in programmatic advertising for a while, and their influence is only set to grow in 2025. These technologies are enabling more sophisticated ad targeting, real-time bidding optimization, and ad creative personalization.
Advanced Audience Targeting
AI algorithms can now analyze vast amounts of data from multiple sources, including user behavior, demographics, and content consumption. A report by IDC shows that According to a new projection in the International Data Corporation (IDC) Worldwide AI and Generative AI Spending Guide, global investment in artificial intelligence (AI)—encompassing AI-powered applications, infrastructure, and associated IT and business services—will surge to $632 billion by 2028, more than doubling from current levels. This growth indicates the increasing reliance on AI for various applications, including advertising.
This wealth of data allows advertisers to create highly segmented and accurate audience profiles. For example, instead of targeting a broad age group, AI can identify a specific subset of consumers within that age range who are more likely to be interested in a particular product or service based on their online activities. This precision targeting not only improves the effectiveness of ad campaigns but also helps in reducing ad spend waste.
Automated Campaign Optimization
Machine learning algorithms can continuously monitor the performance of ad campaigns in real-time. They can make instant adjustments to various campaign parameters such as bid amounts, ad placements, and targeting criteria. For instance, if an algorithm detects that a particular ad placement is generating a high click-through rate but a low conversion rate, it can automatically reallocate the budget to more promising placements.
The machine learning market size is projected to reach USD 206,235.41 million by 2028, according to Cognitive Market Research’s latest report—up from USD 24,345.76 million in 2021. The industry is expected to see a compound annual growth rate of 42.64% between 2023 and 2030.
This growth is due to enhanced utilization in fields like healthcare, banking, and, advertising, where it's used for solving complex problems in automation, predictions, and decision-making. This level of automation ensures that campaigns are always optimized for maximum performance.
Dynamic Ad Creative Generation
AI is also being used to generate dynamic ad creatives. It can analyze the target audience's preferences and behaviors, and then create personalized ad visuals, headlines, and calls-to-action. This means that different users may see different versions of the same ad, tailored to their individual interests. For example, an e-commerce brand could use AI to generate product recommendation ads where the products shown are based on the user's browsing history on their website.
2. The Growth of Connected TV (CTV) and Over-The-Top (OTT) Advertising
Connected TV (CTV) refers to internet-connected devices such as smart TVs, set-top boxes, and game consoles that allow viewers to access digital video content. Over-The-Top (OTT) is a media service offered directly to viewers via the Internet, bypassing traditional cable or broadcast television. With the increasing number of consumers cutting the cord and turning to streaming services, CTV and OTT platforms have become prime real estate for advertisers.
In the U.S. advertising landscape, local TV ad spending is poised for the steepest decline among 17 tracked media verticals, while video/OTT advertising is set to surge by 12.8% in 2023. As more consumers opt for these free or low-cost ad-supported plans, the demand for programmatic advertising on these platforms will increase.
Precise Audience Targeting on CTV
Programmatic advertising on CTV allows for more targeted advertising compared to traditional TV. Advertisers can reach specific households based on factors such as viewing habits, device type, and even the content being watched. For example, a sports equipment brand can target households that frequently watch sports-related content on CTV platforms. This level of targeting is not possible with traditional TV advertising, which typically reaches a broad and often untargeted audience.
The Rise of Ad-Supported Streaming Services
Many streaming services, such as Hulu and Pluto TV, offer ad-supported tiers. A survey by Borrell Associates shows that in 2024, connected TV and over-the-top advertising surged to nearly 30% of all digital revenue at local stations, up from approximately 10% the prior year. Publishers and advertisers can take advantage of programmatic technology to deliver relevant ads to viewers, enhancing the viewer experience while also driving revenue.
New Ad Formats on CTV
CTV advertising is also giving rise to new and innovative ad formats. For example, interactive ads that allow viewers to engage with the ad content, such as clicking on a product to learn more or making a purchase directly from the ad, are becoming more prevalent. These new ad formats offer higher engagement levels and can lead to better conversion rates for advertisers.
3. Privacy-Centric Advertising Solutions
With the growing concern over user privacy and the phasing out of third-party cookies (small text files placed on a user's device by a website, used to track user behavior across different sites), 2025 will see a greater emphasis on privacy-centric advertising solutions.
First-Party Data Utilization
Advertisers are increasingly turning to first-party data, which is data collected directly from their own customers. This data can include information such as purchase history, email preferences, and website interactions. By leveraging first-party data, advertisers can create more personalized ad campaigns while also respecting user privacy. For example, an online retailer can use the purchase history of its customers to recommend relevant products in its ad campaigns. In 2022, Segment, a data infrastructure company, successfully processed over 23 million user deletion requests to uphold user privacy, highlighting the importance of managing first-party data correctly.
Contextual Advertising Revival
Contextual advertising, which targets users based on the context of the content they are consuming rather than on individual user data, is making a comeback. In 2025, we can expect to see more sophisticated forms of contextual advertising. For example, an AI-powered system can analyze the semantic content of an article or video to determine the appropriate ads to display. This approach ensures that ads are relevant to the user's current interests without relying on personal data.
Privacy-First Technologies
New technologies are emerging to enable privacy-compliant advertising. For example, some platforms are using federated learning, a technique where data remains on the user's device or within the user's network, and only aggregated insights are shared with advertisers. This allows for effective advertising without compromising user privacy. Google is also developing privacy sandbox technologies, like the protected audience API, which serves remarketing and custom audience use cases without third-party cross-site tracking.
4. The Expansion of In-App and In-Game Advertising
The popularity of mobile apps and online games continues to grow, making in-app and in-game advertising lucrative areas for programmatic advertising in 2025. The in-game advertising market stood at USD 8.4 billion globally in 2023 and, as per DATAINTELO’s report, is projected to hit USD 21.6 billion by 2032, indicating its significant potential.
Interactive and Engaging Ad Formats
In-app and in-game advertising are evolving to offer more interactive and engaging ad formats. For example, augmented reality (AR) and virtual reality (VR) ads can provide immersive experiences for users. In a mobile game, an AR ad could allow players to interact with a product in a virtual environment, increasing brand awareness and engagement. Google has introduced immersive in-game ads through AdMob, which blend seamlessly into gameplay, unlocking new monetization opportunities for developers.
Programmatic Ad Integration in Games
Game developers are increasingly integrating programmatic advertising into their games. This allows for real-time bidding and targeted ad placements within the game. For example, an ad for a new mobile game could be shown to players of a similar genre of games. Programmatic ad integration also provides developers with a more efficient way to monetize their games. Unity's 2024 gaming report shows that despite a decline in in-app purchases, in-app ad revenues are up 26.7% year-on-year, with simulation games seeing the biggest increase in in-app ad revenue.
Ad Personalization in Apps
Similar to other digital advertising channels, in-app advertising is moving towards more personalized experiences. Apps can use the data they collect about their users, such as usage patterns and preferences, to deliver personalized ads. For example, a fitness app could show ads for fitness equipment or supplements that are relevant to the user's fitness goals.
5. The Growth of Programmatic Digital Out-of-Home (DOOH)
Digital Out-of-Home (DOOH) advertising includes digital billboards and screens in public spaces. This form of advertising is experiencing a significant boost with the integration of programmatic technology.
Real-Time Ad Updates
Programmatic DOOH allows for real-time ad updates. Advertisers can change the content of their ads based on various factors, such as time of day, location, and even weather conditions. For example, a coffee shop could display an ad for hot coffee on a cold day and an ad for iced coffee on a hot day on a nearby digital billboard.
Targeted Advertising in Public Spaces
Programmatic technology enables more targeted advertising in public spaces. By using data such as foot traffic patterns and demographic information of the area, advertisers can display relevant ads on DOOH screens. For example, a luxury brand could target high-end shopping areas with its ads on digital billboards.
Integration with Other Advertising Channels
Programmatic DOOH is also being integrated with other advertising channels. For example, an advertiser could run a coordinated campaign across digital billboards, social media, and mobile apps. This integration allows for a more seamless and cohesive brand experience for the consumer.
How GatherStar Fits In
GatherStar, an AI-driven programmatic ad platform, is well-positioned to help advertisers and publishers navigate these emerging trends. By leveraging advanced AI algorithms, GatherStar can optimize ad placements, target the right audiences, and generate dynamic ad creatives. Whether it's taking advantage of the growth in CTV and OTT advertising, ensuring privacy-compliant advertising, enabling in-app and in-game advertising, or empowering programmatic DOOH, GatherStar provides the tools and technologies to stay ahead in the ever-changing programmatic advertising landscape.
In conclusion, 2025 is shaping up to be an exciting year for programmatic advertising. By staying on top of these trends and leveraging the right technologies, advertisers and publishers can stay ahead of the competition and achieve their advertising objectives.
If you’re looking to craft more effective, AI-driven ad experiences, start with GatherStar today. And if you want dedicated expert support to maximize your results, reach out to the GatherStar team to explore how we can help elevate your programmatic campaigns.