AI Search Forces Ad Spend Rethink
Forrester forecasts a significant decrease in open web display advertising budgets, with some estimates suggesting a 30% cut due to the rise of AI-powered search tools and zero-click search trends such as Google Overviews. These developments reduce the visibility of traditional publisher sites, shrinking addressable audiences and limiting advertisers’ ability to engage users on the open web.
The Shift Towards Measurable and Engaged Audiences
As advertisers face diminishing returns from open web display, budgets are shifting towards channels offering clearer measurability and stronger audience engagement. Connected TV (CTV) and paid social platforms have seen increased investments because they provide transparent performance metrics. Brands are prioritizing channels where the impact of their spending can be directly verified and optimized.
Retail Media Networks: A Strategic Beneficiary
Retail media networks have emerged as a primary beneficiary in this reallocation of ad spend. According to WARC data, retail media continues to demonstrate resilience and growth, outperforming traditional open web display in several aspects. Retail media networks offer advertisers access to directly addressable audiences empowered by robust first-party data and purchase intent insights. Their shoppable ad formats drive measurable conversions along the customer journey, delivering closed-loop reporting that many other channels cannot match.
Positioning Retail Media for the Future
In an environment disrupted by AI search and zero-click behavior, retail media stands out as a reliable and effective advertising channel. It compensates for the limitations faced by open web display by combining precise audience targeting, transparent measurement, and integration with purchase activity. Brands and agencies focused on performance-driven marketing should consider retail media networks an essential component of their evolving media mix.
