AI, market consolidation, and sustainability: digital advertising predictions for 2025

2025 is upon us, and with it comes new upheavals and opportunities for those of us in the digital advertising sector. It’s fair to say that the trends around the uptake of Generative AI will continue – or even accelerate – as the year progresses. So too will those around growing consumer awareness of sustainability issues, and European legislation designed to curb our energy-hungry activities.

So, with all that barrelling towards us, we thought it was high time we attempted to chart a roadmap for some of the biggest issues of the coming year. We hope that you find it as useful to read as it was for us to write.

The rise and rise of energy-intensive digital advertising formats 

AI has been a key focus for digital marketers for some time, initially impacting behind-the-scenes tasks like segmentation and targeting. Now, with the rise of generative AI, we're witnessing a new era of AI-powered marketing, where AI plays a more visible and creative role. It will only become a bigger part of the marketing mix over the course of 2025, due to the heavy push it is receiving from companies including OpenAI, Meta, IBM, and other giants of the industry.

But as its use grows, so too do concerns about its place in digital advertising. That includes AI’s environmental impact, particularly the cost in electricity and water usage, which is gaining increased recognition among both industry practitioners and consumers.

As our CEO Vincent Villaret explains: “[AI] is quickly becoming a cornerstone of the industry. From creating highly personalised ads to optimising campaign algorithms, AI processes require substantial computational power, which translates into higher energy consumption – and ultimately higher emissions.”

In practice, such increased awareness will force digital advertisers to acknowledge the carbon footprint generated by AI, even if they haven't yet developed strategies to significantly reduce it.

Furthermore, the rise of energy-intensive advertising formats like Connected TV (CTV) presents a significant challenge. With CTV ad spend projected to double by 2028 (source: IAB).

The programmatic infrastructure itself is energy-intensive, meaning that as digital advertising expands, so too does its environmental footprint

Regulatory Fixes and Changes Impacting Digital Advertising

That puts our sector squarely in the way of the EU’s ongoing attempts to curb, limit, and reduce carbon emissions, in line with its commitment to sustainability targets.

Environmental reporting requirements loom large in early 2025 under the Corporate Sustainability Reporting Directive (CSRD), and we predict a scramble as companies grapple with these new rules. Much like the initial rush to comply with GDPR, we expect similar challenges with CSRD implementation. While two-thirds of companies express confidence in their readiness, less than half have completed key activities, with many still relying on spreadsheets rather than specialized tools or technology.

Nevertheless, both the CSRD and the Global Media Sustainability Framework represent crucial steps forward — especially following the hottest year on record. These initiatives ensure marketing stakeholders remain accountable and must address energy consumption and greenhouse gas emissions within the sector.

Tech consolidation

Beyond changes to product and legislation, we predict this year will see market consolidation across the marketing industry. That will, of course, have implications for not just ad tech companies, but also the clients that partner with them.

This consolidation is likely to come through acquisitions among specialist vertical platforms or horizontal platforms providing more generalist solutions. This trend could redefine the competitive landscape, with potential implications for energy consumption and efficiency, as larger players integrate their operations and infrastructure.

The need for action in digital advertising

Of course, nothing happens in a vacuum. All of the above, from the rise of AI to market regulation and consolidation, will all impact each other. Part of the problem with creating change in the industry is its complexity, with all of those factors and more interacting constantly.

One final prediction: we believe that 2025 will also provide many opportunities for the advertising industry to show its commitment to sustainability, with the topic evolving from a nice-to-have into a must-have as a direct result of the shifts outlined above.