• by Laurie Sullivan  @lauriesullivan, November 14, 2024

Budgets will shift to emerging AI-powered channels that embrace creative automation and conversational commerce as marketers begin to feel more optimistic about the coming year.

Seventy-five percent of participants in a study from Smartly released today anticipate a budget increase to support change.

“Typically, performance and brands sit on different sides of the business, but we are seeing a convergence with budgets and teams growing with more investments in marketing,” said Brianna Gays, senior vice president of communications and marketing at Smartly. “There’s a need for combined scale.”

Thirty percent of the advertising spend on Smartly’s platform is video that runs through paid social and Google, which she said has increased significantly from last year, creating efficiencies.

Findings from Smartly’s global Digital Advertising Trends 2025 report, released today, identified preferences, business trends and where advertisers want more tools, technology and innovation.

The 2024 commissioned research ran between September and October of 2024. About 459 marketers -- not all Smartly customers -- participated across the U.S, U.K. and APAC at organizations that spend at least $2 million or more in paid social, programmatic and other media annually. The participants work at agencies and brands.

Two-thirds of the survey participants believe their company’s marketing and advertising now perform better than last year, and nearly eight in 10 agree that commerce will become part of social media and entertainment strategies to improve performance.

"Sight, sound and motion have become even more important because there are so many channels," Gays said. "How many and the sheer volume of marketers shifting to walled gardens from the open web was a surprise to see in the data."

AI has become the automation tool supporting the shift, with 55% of marketers in the study from Smartly saying they use AI to create artwork for ad campaigns. Many cite the ability to customize AI for specific needs to ensure the technology is used responsibility with consistency, and some 52% use AI to create ad copy.

To get a sense of the magnitude of Smartly -- an ad-tech company owned by private equity firm Providence Equity Partners -- its AI commerce platform powers more than 800 billion impressions, generating more than 300 billion pieces of creative annually.

It is one of Meta's biggest partners for their Advanced+ Shopping Campaigns (ASC).

Creative automation enables marketers to produce high-quality ad content faster, as enhanced creative experiences are increasingly essential across formats.

Some 84% of survey respondents agree that search is shifting toward visual elements, but 70% believe creative remains the biggest challenge, even among those who effectively use AI for creative production.

Conversational commerce, the ads that appear in chatbots from Google and Meta, have emerged as a top priority for 2025, with 70% of marketers saying they will focus on it next year.

This shift to platforms like WhatsApp, Facebook Messenger, and voice assistants allows brands to engage customers in one-to-one dialogue, creating deeper connections and accelerating conversions.

Marketers with expanding budgets are 10% more likely to take a chat-based approach as a key driver for meaningful, lasting customer relationships, and 80% of marketers agree enhanced reporting will be crucial next year to provide a unified view of performance.

AII’s ability to analyze consumer behavior leads to more effective and targeted campaigns.

AI provides tools for testing and predicting how creative assets will perform based on past data, enabling better decisions, the company said.