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August 9, 2025

Digital advertising is changing faster than ever, and the massive changes in technology, consumer expectations, and platform evolutions are causing its growth. In the next five years, three trends will revolutionize the digital advertising market: the use of artificial intelligence in delivering more personalized digital ads, augmented reality (AR), and the end of third-party cookies.

AI-Driven Personalization

Artificial intelligence (AI) will also significantly optimize the quality of ad targeting and the personalization of messages. The presence of algorithms that can process unimaginable quantities of data on user behaviors in real-time means brands can use these actions to make hyper-relevant communication that boosts participation and conversion. In one McKinsey report, the authors discovered that personalization offers five to eight times the return on marketing investment and can increase sales by 10 percent or more. Platforms such as Google Ads and Meta already deploy machine learning to maximize the placement and creative performance (Sneader & Singhal, 2021). Predictive models will enable advertisers to know in advance what customers need and present their adverts at the most opportune time as the AI becomes more intelligent.

Augmented Reality (AR) Advertising

AR will generate more experiential and immersive advertisements, particularly in the retail and product visualization areas. AR can also give the viewer a perspective on how clothes, makeup, or furniture would look on them before purchase, leading to increased consumer faith and lowered returns. According to Statista, the market of AR advertisement will reach more than $9 billion by 2028. Companies such as IKEA and Sephora already have some experience allowing purchasers to use augmented reality in their applications and social media (Sak et al., 2025). With increased access to AR via mobile apps and wearable technology, the technology will become a regular feature of an online campaign.

The Demise of Third-Party Cookies and the Rise of Privacy-First Advertising

Since Google will gradually eliminate third-party cookies by 2025, marketers will transfer to privacy-oriented initiatives, such as gathering first-party information and contextual advertising. This shift compels brands to prioritize the fields of openness and client approval. According to Adobe, three out of four marketers invest in first-party data strategies to keep up. Contextual targeting, which puts ads according to the nature of a web page but not the user actions, is also gaining popularity as a privacy-friendly method that does not lead to a lack of relevance (Desta & Amantie, 2024). The three trends, AI personalization, AR immersion, and privacy-first approaches, will contribute to creating a future in digital advertising that can be described as more intelligent, user-centric, and ethical. The first movers who change their adaptations will be first in consumer engagement and trust.

References

Desta, E., & Amantie, C. (2024). The role of artificial intelligence on market performance: Evidence from scientific review. Journal of Economics and Behavioral Studies, 16(1), 82–93. https://core.ac.uk/download/pdf/618153336.pdf

Sak, T., Mylko, I., Ivashko, O., Chulipa, I., Wołowiec, T., & Sokołowska-Woźniak, J. (2025). How the Digital Economy Is Revolutionizing Marketing Management and Driving Sustainable Development. Sustainability, 17(3), 1130. https://www.mdpi.com/2071-1050/17/3/1130

Sneader, K., & Singhal, S. (2021). The next normal arrives: Trends that will define 2021–and beyond. New York, NY: McKinsey. https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/Leadership/The%20next%20normal%20arrives%20Trends%20that%20will%20define%202021%20and%20beyond/The-next-normal-arrives-Trends-that-will-define-2021-and-beyond-Final.pdf