AI is transforming digital advertising, but the industry faces challenges with the pace of change.
Jarrod Allen of Monks explains how Microsoft and Google are shifting focus to AI-driven advertising platforms, with Meta investing heavily in generative AI.
He expects the next 12 months will see dramatic shifts in SEO and SEM strategies, as AI tools reshape search marketing.
AI is transforming digital advertising from the ground up—redefining roles, reshaping platforms, and reimagining creativity. With AI set to power everything from planning through campaign execution and measurement, the industry sees vast opportunities to its potential. But it’s also wrestling with the pace and complexity of change.
This seismic shift creates what Jarrod Allen, Associate Director of Strategic Media Solutions at digital-led marketing technology consultancy Monks, calls a “huge time of uncertainty.” Allen, whose work involves driving innovation and collaboration with top-tier clients and providing strategic media consultancy, offers his views of of this AI-fueled future.
Big tech moves: Microsoft, for example, will retire its Xandr DSP by early 2026, focusing instead on its Microsoft Advertising Platform, which will use AI like Copilot to forge more “conversational” and “agentic” advertising. Google is heading in a similar direction with its AI Max for Search. By placing ads in ‘AI Overviews’, its leadership says the AI transformation outstrips even the mobile revolution in importance. Meta is also pouring investment into its Advantage+ suite, and generative AI.
AI’s ecosystem overhaul: “AI is overhauling every element of the ecosystem,” Allen says. “You’ve got non-traditional advertising platforms like ChatGPT changing the role of search and SEO, so it’s a huge time of uncertainty. Whoever can leverage AI in a way that gives advertising all the control it needs to drive the best results will be the clear winner.”
As the AI wave reshapes the Demand-Side Platform (DSP) market, dominant forces like The Trade Desk (with its Koa AI), and Google’s DV360, are building in more AI, forcing smaller DSPs to innovate or fade away.
Advertiser apprehension: Still, advertisers approach with caution. While about 86% of marketers intend to use more AI, a “trust deficit” lingers, fed by worries over AI’s “black box” operations, data privacy, and diminished control. Only around 30% have fully adopted AI. Allen underscores this: “Until there’s a solution that gives advertisers enough control and certainty, I don’t think anyone’s going to go full-blown AI.”
Data’s evolving frontier: Adding to the complexity is the future of cookies and data, as Google Chrome advances its plans for a full third-party cookie phase-out, steering the industry toward first-party data and new privacy-focused tech. Allen points out that, in this climate, data partnerships and the boom in retail media networks become even more vital as DSPs hunt for rich shopper data.
Near-term disruptions: For the next 12 months, Allen foresees dramatic changes in how organic SEO needs to be done to accommodate all the AI tools that are impacting search, a forecast backed by research showing new statistics for generative AI. He also expects new AI-powered SEM tools and perhaps major strategy shifts from tech companies. Looking further ahead, Allen imagines the advertising field might simplify, echoing Mark Zuckerberg’s idea of AI managing intricate campaigns from simple inputs, resulting in fewer, yet more potent, tools.
Navigating the future: This journey through AI’s new domain, Allen concludes, is about striking a balance between AI’s capabilities and advertisers’ desire for command. “It’s a really interesting time. AI is thrown around as a buzzword, but it’s one that you can’t ignore because it’s fundamentally changing everything we do,” he says. “So, there’s a lot of uncertainty, but there’s a lot of excitement out of it as well.”
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