Join us Sept. 14-16 in Miami to connect with top publishing leaders
Ad spend forecasts revised upward as more ad dollars are handled by AI tools
U.S. advertising spending is set to rise faster than expected this year, but so is the proportion of ad dollars spent through AI or automated campaign types like Meta’s Advantage+ or Google’s Performance Max.
The Interactive Advertising Bureau (IAB) estimates that U.S. ad spend will grow 12.3% this year, up from its previous estimate of 9.5%.
David Cohen, CEO of the IAB, said the upward revision was the result of strong spending around the Winter Olympics and soccer’s World Cup. “The first half was strong, major live events delivered, and advertisers have increasingly powerful tools in their arsenal to find and engage customers,” he said.
Research consultancy Madison & Wall estimated global ad spend to grow 11% (9.8% excluding U.S. political ad spend) this year, to more than $1.3 trillion. Global ad spend grew 12.9% in the second quarter, per Madison & Wall’s projections.
Surprisingly, the share of ad dollars spent through automated or AI campaign types will rise to 12% of U.S. ad spend ($479 billion excluding political), according to Madison & Wall’s estimates, up from up from 2% in 2023.
By 2030, it estimates AI-directed spend will rise further – to reach $158 billion, 27% of the U.S. ad market.
Luke Stillman, managing director at Madison & Wall, said that the rise in AI ad dollar share was due to the convenience of those tools for both small and large advertisers. “This is a share shift,” he explained.
Campaign formats built around generative or other forms of AI have become common among platform ad sellers. In addition to Meta and Google, Reddit, Pinterest and TikTok each offer automated campaign types. According to Tinuiti, PMax campaigns have accounted for 60-70% of ad spend among retail clients since the fourth quarter of 2025.
Four media agency practitioners told Digiday usage was already significant among their clients.
“We don’t think automation in media stops at 20% or 30% — we think it gets to 90%,” said John Dawson, vp of strategy at Jellyfish. “AI is entering every part of the marketing lifecycle, and that will transform how media is planned, bought and optimized.”
Earlier this year, WPP estimated that AI search ads — that is, ads running in AI search environments like ChatGPT or AI Overviews — would become the fastest growing channel in advertising. Google’s AI Max, an automated campaign type, is also currently the only means for brands to buy advertising against AI content.
“We definitely have a lot of brands leaning into it, because the platforms themselves are pushing it,” said Danny Weisman, co-founder of indie media agency Obsessed. “It’s a pretty easy box to check.”
Close to one-third (30%) of Google’s search spend now uses AI Max or Performance Max, while Meta’s Advantage+ run rate is on track to hit $75 billion this year, up from $60 billion in 2025, per comments made by CFO Susan Li during the firm’s latest earnings call. “We’re working to deepen adoption as advertisers who leverage multiple tools see compounding performance gains,” Li told analysts in July.
Becca Shih, performance marketing specialist at media agency Roast, told Digiday that 11-12% of the search spending handled by the agency used Performance Max, placing it roughly in line with Madison & Wall’s estimate. “It’s becoming the default option for major platforms,” she said.
Weisman said that some obsessed clients already directed as much as 30% of their ad dollars through Advantage+. He didn’t provide specific details. “I believe most, if not all, my brands have at least experimented with these types of campaigns,” he said.
Scott Hendler, associate director, paid search at Ars X Machina, said a significant proportion of the agency’s search spending was funnelled through PMax.
“It takes up well over 50% of our [client] budgets. I could definitely see that trend going in this direction,” he told Digiday.
In line with the increasing use of AI campaign types, the IAB estimates that spending on social media, commerce media and CTV accounted for much of the year’s growth. Social media spending is expected to increase 16.5% this year, with CTV growing 15.6% and commerce media 13.6%; investment in digital out-of-home and non-CTV digital video is expected to decrease by 0.4% and 0.2% respectively.
Madison & Wall estimated that Google owner Alphabet, along with Meta and Amazon, would account for 60% of all ad revenue in North America, 59% in Europe, the Middle East and Africa and 53% in China.
Roast’s Shih said that, despite the increasing use of automated ad campaign types, clients should still exercise caution over their performance. Tools such as Performance Max have been criticized by buyers in the past for providing an inscrutable media “black box”.
“I see it quite similar to how we use tools like ChatGPT,” she said. “If you give AI a poor context you’re probably going to get a poor answer from it; AI campaign types are the same.”
More in Media Buying
Google avoided (yet another) breakup… now comes the test of the ad tech remedies
Here’s how Google’s GAM might look after the next 30 days, following the closing stages of its marathon antitrust trial.
‘Frogs in the boiling water’: The Amazon-FTC case and the myth of ad auction transparency
The regulator accused Amazon of “deceptive and unfair practices,” but the e-commerce giant’s opaque auction dynamics aren’t all that unusual in today’s digital ad market.
Marketers face dilemma around rising bot and AI web traffic
Bot traffic is rising for e-commerce brands and interfering with retargeting strategies. But marketers are split on whether they should remain open to AI visitors or work harder to block.