The advertising industry is currently navigating a landscape of sharp contrasts and rapid evolution driven by advances in artificial intelligence and shifting regulatory frameworks. This week, tech giants such as Google and Meta have introduced an array of AI-powered advertising and shopping tools designed to optimise campaign performance and improve user engagement during the crucial holiday shopping season. At the same time, publishers face increasing economic pressures as AI crawlers scrape vast amounts of content but generate only minimal revenue in return, highlighting the ongoing struggle between platform ambitions and publisher realities.
Google has rolled out four new Demand Gen capabilities aimed at helping advertisers prepare for the 2025 holiday period compressed by shifting consumer behaviours. These include expanded brand suitability controls now covering YouTube Home feed, watch next feed, and Discover placements, with three inventory modes, Standard, Expanded, and Limited, allowing advertisers to tailor content adjacency filters for different brand sensitivities. Complementing this, asset-level experimentation enables systematic testing of creative variations, with Google citing internal data that organisations conducting monthly optimisation tests see a 3.1-fold return improvement over two years, based on iterative 5% gains per experiment. Additional updates, such as AI-powered image automation and video creative enhancements, build on reported average conversion increases of 20% among Demand Gen advertisers in the first half of 2025. Moreover, Google has integrated smarter shopping features into Demand Gen campaigns, including product feeds and local product availability displays, enabling more comprehensive and omnichannel campaign strategies for retailers and e-commerce brands.
Meta, similarly, has issued detailed festive season guidance emphasising its Advantage+ automation platform, which has delivered an average 22% increase in return on ad spend throughout 2025. The guidance urges advertisers to adopt a two-phase planning approach: third quarter for goal definition and testing, followed by fourth and fifth quarter execution informed by earlier results. Insights into shopping behaviours reveal that 15% of shoppers begin in late November, with 18% starting in early December. Meta’s recent deprecation of legacy campaign APIs in favour of Advantage+ structures reinforces the company’s strategic pivot towards AI-driven campaign management, with full migration required by early 2026.
In a significant advance for autonomous shopping, Google launched agentic features on November 13, utilising its expanded Shopping Graph of over 50 billion product listings. These allow AI systems to autonomously complete purchases through agentic checkout when prices fall, place Duplex-powered phone calls to verify local stock, and engage in conversational shopping via AI Mode in Search and the Gemini app. Early merchant participants include Wayfair, Chewy, Quince, and selected Shopify retailers, reflecting Google’s incremental adoption strategy. Despite the technological promise, scepticism remains concerning structural challenges to agentic commerce adoption, such as retailer resistance to AI intermediation, high e-commerce return rates, and consumers’ preference for thorough option evaluation before purchasing.
The Google ecosystem saw further AI integration with the launch of Gemini 3, embedded directly into Search on November 19, enhancing AI Mode’s reasoning and generative capabilities. Gemini 3 supports complex query responses with rich visualisations, interactive content, and detailed explanations, though the technology has provoked mixed reactions, including concerns about content reproduction among bloggers. Concurrently, Google introduced Nano Banana Pro, its most advanced AI image generation model built on Gemini 3 Pro, offered to pro and ultra subscribers in the U.S. This tool facilitates sophisticated ad creative generation and editing, supporting brand alignment and campaign consistency through advanced prompt understanding and brand guideline adherence.
Expanding access to measurement tools, Google significantly reduced the entry budget threshold for incrementality testing from nearly $100,000 to just $5,000, enhanced statistical models to improve conclusiveness by 50%, and accelerated reporting. These capabilities now cover Video, Discovery, and Demand Gen campaigns with broader availability pending account representative coordination. Such developments complement Google's broader measurement ecosystem, including its Bayesian-powered Meridian Marketing Mix Model which integrates experimental data from diverse channels and methodologies, thus empowering advertisers to validate new customer acquisition and retention strategies more accurately.
Nevertheless, publishers face severe economic headwinds as artificial intelligence increasingly reshapes content distribution. A revealing example emerged this week showing a media company earning only $174 despite millions of pages being scraped by AI crawlers, underscoring the disparity between AI companies harvesting vast content for training and answer engines, and publishers bearing related costs with little financial return. While a handful of major publishers have negotiated licensing deals with AI firms, most websites receive no compensation. The high server load, bandwidth demands, and resource strain further deteriorate the business case for allowing AI access unchecked, prompting initiatives ranging from AI crawler blocking to litigation for fair revenue sharing.
Adding to platform dynamics, legal battles have intensified as Google, YouTube, and Meta filed separate federal lawsuits challenging California Senate Bill 976’s restrictions on personalised content feeds for minors, asserting that such regulations infringe on editorial rights and free speech access. This follows a complex judicial history with litigants including NetChoice, whose prior constitutional challenges were partly denied. These disputes reflect broader tensions as regulators attempt to impose content controls, and platforms defend their operational prerogatives.
Privacy concerns retain prominence in programmatic advertising, exemplified by Google’s recent class-action settlement in California agreeing to implement an opt-out "RTB Control" or off-switch for data sharing in bid requests. This would eliminate client identifiers, IP addresses, and other metadata in real-time bidding, a move potentially setting a precedent for wider regulatory demands. Although Google maintains its stringent data-sharing policies and no personally identifiable information is sold, the settlement signals increasing pressure towards enhanced privacy controls that could impact the efficiency of Google's ad ecosystem and stimulate innovation from competitors.
Within the broader media and advertising ecosystem, streaming platforms are refining audience measurement approaches. Netflix introduced Monthly Active Viewers (MAV) as a new metric that better captures co-viewing habits across household members compared to traditional Monthly Active Users (MAU), thereby providing advertisers with a more transparent and nuanced understanding of audience engagement, especially in ad-supported contexts.
Meanwhile, alternative browsers like Brave demonstrate sustained growth signals, with the company generating $25 million revenue in Q1 2025 predominantly via its proprietary search ads product. Brave’s commitment to building its own search index rather than relying on licensing from Bing or Google positions it uniquely in anticipation of potential regulatory mandates requiring Google to share search index data with competitors. This offers an intriguing counterpoint to dominant platforms by highlighting a privacy-focused model that combines contextual advertising with viable commercial prospects.
On the regulatory front in Europe, the recently published Digital Omnibus package seeks to simplify digital compliance obligations by reducing administrative burdens by 25% overall and 35% for small and medium enterprises by 2029. While aimed at easing the complexity accrued from GDPR and other tech laws, the reforms could have varied effects across stakeholders, potentially easing conditions for ad tech but also reinforcing Big Tech and AI companies’ operational scope.
However, challenges persist for open web display advertising, which is forecast to face a 30% budget cut as brands shift spending toward connected TV and paid social platforms, driven by zero-click search phenomena and demand for more measurable ad outcomes. Industry voices confirm substantial reallocations during 2025, reflecting a broader trend toward channels offering superior measurement and engagement, such as interactive and shoppable formats on streaming platforms. This shift underscores profound changes in advertiser confidence and publisher revenue models alike.
In response, leading publishers are accelerating diversification efforts. Forbes recently introduced an AI-powered dynamic paywall to personalise subscription offers based on reader behaviour signals, aiming to mitigate the impact of declining search referrals and programmatic revenues amid a reluctant subscription audience. Such initiatives signify a strategic pivot toward subscription and first-party revenue streams as uncertainty rises around traditional digital advertising.
Taken together, these developments highlight an advertising ecosystem in the midst of profound transformation. The rapid integration of AI technologies by dominant platforms offers new efficiencies and creative possibilities for advertisers but simultaneously exacerbates economic and regulatory tensions, particularly for content creators and publishers struggling to secure fair value in a digital landscape increasingly dominated by autonomous systems and privacy imperatives. As the 2025 holiday season unfolds, how these competing forces balance will be critical in shaping the future contours of digital commerce and media monetisation.
📌 Reference Map:
- [1] PPC Land - Paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15
- [2] Google Blog - Paragraphs 2, 3
- [3] PPC Land (Meta release) - Paragraph 3
- [4] Reuters (Gemini 3 launch) - Paragraph 5
- [5] Tom’s Guide (Nano Banana Pro) - Paragraph 5
- [6] Social Media Today - Paragraph 3
- [7] Digidarts - Paragraph 3
Source: Noah Wire Services