Investing.com — Piper Sandler released key findings from its fourth annual US Ad Buyer Survey, covering insights from approximately 40 respondents managing over $8 billion in digital ad spend. The survey highlights robust optimism in spending growth, increased adoption of AI tools, and improved economic confidence among advertisers.
For the first time, respondents predict an acceleration in both total and digital advertising spend in 2025. Total (EPA:) ad spend is projected to grow by 5.3% year-over-year, up from 5.0% in 2024, while digital ad spend is expected to see an 80 basis point acceleration. Core growth trends appear strong despite one-time boosts from the 2024 Olympics and political campaigns.
Also, AI tools emerged as a significant driver of spending, the survey shows. “Google (NASDAQ:) Gemini and Performance Max were voted the products with the most potential to improve next year,” each receiving 56% of respondents’ votes, followed by Meta (NASDAQ:)’s Advantage+ and Amazon (NASDAQ:) Media Cloud. Moreover, 75% of respondents identified AI-powered advertiser tools as the most impactful trend for the industry.
Economic concerns among advertisers have eased notably, with only 21% expecting a recession in 2025, compared to 36% last year. In addition, respondents believe privacy changes, such as Apple (NASDAQ:)’s App Tracking Transparency, have largely been absorbed, with 28% indicating performance has returned to pre-ATT levels.
“All the main advertising issues have eased,” Piper Sandler analysts noted.
Regarding TikTok, 64% of respondents see the ban as unlikely.
The survey also details shifts in ad formats and provider shares. Digital video and connected TV (CTV) continue to gain traction, with CTV expected to capture 22% of ad budgets in 2025, up from 18% in 2024.
Google remains dominant in search, holding an 85% share, while TikTok and X/Twitter are poised for share gains in social media. The Trade Desk (NASDAQ:) is positioned as a key player in the programmatic ad space, benefiting from increasing CTV adoption.
In terms of potential risks, the investment bank notes that “peak and trough sentiment have been contra indicators in the past,” suggesting potential challenges if growth fails to meet elevated expectations.
“Our survey suggests industry sentiment is optimistic again, which could be negative for ’25 digital ad returns,” they added. “Our bottoms up would suggest ad revenues accelerated 3% and 5% the last two years. So a 300bps projected deceleration may be less digestible.”
