What is the story about?
What's Happening?
Artificial intelligence is significantly altering the digital media landscape by reshaping how users access information and how advertisers target audiences. Traditional audience targeting models, which relied heavily on collecting behavioral signals to create probabilistic segments, are becoming unstable due to AI systems like ChatGPT and Copilot. These AI tools are changing user engagement patterns, leading to a decline in traffic to the open web. A study revealed that in 2024, 58% of Google searches in the U.S. resulted in zero clicks, indicating a shift away from traditional web navigation. This change is affecting data providers and publishers, as fewer web page visits result in reduced behavioral data collection, diminishing the effectiveness of cookies and scaled audience models.
Why It's Important?
The transformation driven by AI has significant implications for advertisers and publishers. As passive data capture declines, advertisers must rethink their targeting strategies, moving away from quantity-focused approaches to prioritize quality and relevance. This shift necessitates a focus on curated audiences built on deterministic inputs and validated intent. Channels such as connected TV, social platforms, and digital out-of-home environments are becoming more important due to their clearer intent indicators. Advertisers need to adapt their strategies to leverage these channels effectively, ensuring that their audience targeting is performance-informed from the outset. This evolution in data strategy is crucial for maintaining effective advertising campaigns in a rapidly changing digital environment.
What's Next?
Advertisers and data providers must evolve their strategies to accommodate the changes brought by AI. This includes developing smarter data mixes that incorporate first-party data, contextual signals, and high-quality partner data. These inputs must be flexible, privacy-resilient, and support omnichannel activation. Data marketplaces are expected to play a more strategic role, helping buyers navigate complexity and assemble custom solutions based on performance and campaign fit. The focus will be on quality and relevance over raw volume, enabling advertisers to confidently plan campaigns across the digital media spectrum.
Beyond the Headlines
The disruption caused by AI in the data supply chain highlights the need for a fundamental redesign of audience targeting practices. This involves moving beyond traditional models and embracing a new supply chain that prioritizes quality and performance. Advertisers and data providers must adapt to these changes to remain competitive in an industry where traditional signals are no longer guaranteed. The evolution of data marketplaces into strategy engines reflects this shift, offering transparency and guidance to connect data inputs with business outcomes effectively.
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