Ad Tolerance is Rising: How 2025 Will Redefine the Future of Advertising

By: Cara Hathaway & Fariba Zamaniyan

2024 marked a year of significant change in the advertising space, with several notable shifts that have set the stage for 2025. The industry saw a move from endemic content to non-endemic advertisements and a transition to a different model with retail media networks (RMNs) led by power houses such as Amazon and Walmart, leveraging the value of first-party data within individual walled ecosystems. The advertising industry is experimenting with what works in a more connected environment and finding its footing.

Alongside these industry-wide changes, there has been an increased tolerance for ads among consumers. This shift in sentiment has been one of the most notable changes, with more brands evaluating this tolerance and driving momentum in an advertising-centric era.

Another major trend this year was the pervasive influence of artificial intelligence (AI). While its impact continues to be significant, it is not the only innovation to watch as we look ahead to 2025. AI will influence every aspect of the ecosystem, but other changes are also on the horizon. Looking forward to the new year, we anticipate changes in two main areas: the ongoing journey between finding a balance with privacy and personalization, and the blurring lines between advertisements and content.

Finding the Balance with Privacy and Personalization

Key to the execution of advertising within the digital ecosystem where we operate today is data and consumer privacy. Without it, personalization and relevant ad delivery would not be possible. This coming year we can expect an intensified discourse around balancing consumer data privacy and advertising.

Stringent regulation surrounding the use of consumer data has already begun at the state level across the U.S. Increased regulation is expected, putting more pressure on the digital advertising ecosystem to comply with the adoption of consumer opt-in practices and procedures in order to target and deliver advertising. This opt-in culture is essential because consumers should have the right to decide what data they share and when. Therefore, educating users about what opt-in vs. opt-out could lead to is becoming increasingly important - more personalized experiences with content and brands vs. irrelevant content and ads served to them leading to greater displeasure with the entertainment experience The consumer experience must be at the forefront of development in advertising solutions. By opting in to a more personalized, data-driven approach, consumers will receive better-relatable ads, which will enhance the overall entertainment experience.

We must figure out this balance between personalization and privacy, especially as consumer ad tolerance continues to grow. As ads permeate more areas of the entertainment experience - from the home screen and out of home to cars - brands will be better positioned to follow consumers along their consideration and purchase journey. But to be able to do so, consumers need to understand the benefits of sharing their personal behavioral data - and companies need to leverage this data ethically and responsibly. By gaining insights into who a consumer is, brands can reach the most relevant and interested audiences, which will remain increasingly important even as ad tolerance reaches new heights.

Blurring the Line Between Ads and Content

The other piece of this puzzle is creating and serving ads that don't feel like ads - keeping people entertained. The next generation of advertisements will make it seamless to go from viewing an ad to purchase consideration.

As consumers shift their content consumption to shorter, bite-sized entertainment, advertisers and their agencies must create catchy ads that blur the line between ads and entertainment while ensuring that consumers are getting the information that they need in the shortest amount of time needed to digest what is on screen. One of the ways advertisers and agencies will be able to achieve this is through AI-powered technologies. An advertiser can buy an ad spot on the platform most relevant to their viewer and create multiple, easily interchangeable advertising imagery that can be swapped in and out depending on the viewer's interests.

As we explored earlier this year, this integrated model isn't new. However, as AI becomes more embedded in the creative workflow, it will enable more seamless campaign management. Instead of just seeing a well-known luxury watch on the main character of a lifestyle series, you'll see them highlighting features like water resistance for outdoor enthusiasts or its sleek design for when in business settings on the show, whichever is most likely to resonate with the viewer. The ad will offer interactive features, starting from your TV screen and extending to your mobile device, where you can easily go find the watch brand online and in-store. This tailored approach will make advertising even more relevant.

These advancements in creating a customized, non-intrusive advertising experience will enhance the buying process for advertisers via the integration of retail media and CTV advertising. By leveraging the combined powers of retail media and CTV, advertisers will be able to overcome the hurdle of purchasing with a remote control.

People spend so much time in front of a TV that when these two advertising channels work together, it'll not only paint a better picture of who a user is for advertisers and brands, but most importantly make advertisements more relevant and the purchase process easier for consumers.

This rapidly advancing technology is drastically changing the advertising landscape over the coming year. At the heart of these changes is a better, more seamless advertising experience for consumers. If AI-powered advertisements and innovations are implemented ethically, especially regarding consumer data privacy, it will be a significant game changer for the industry.