AdRoll’s Q2 2025 State of Digital Advertising Report presents key insights from over 20,000 online businesses, shedding light on the shifting digital advertising landscape. The report explores trends in ad pricing, economic sentiment, platform changes, and evolving consumer behavior—all shaping how brands approach digital marketing amid economic uncertainty.
1. Lower Display Ad Costs Signal Shift in Strategy
- Display prospecting ad CPMs dropped 27% year-over-year in Q1.
- Indicates reduced investment in upper-funnel campaigns amid economic slowdown.
- Brands focus spending on high-intent users for measurable ROI.
2. Retargeting Remains Crucial Amid Budget Cuts
- Retargeting CPMs fell by only 8%, showing sustained value.
- Marketers prioritize lower-funnel tactics that drive immediate results.
3. Economic Sentiment Impacts Marketing Decisions
- U.S. consumer sentiment index dropped over 20 points in early 2025.
- Inflation expectations reached 6.6%, a new high.
- These indicators influence brands to focus on performance-driven efforts.
4. Expert Insight: Maintain Visibility Amid Uncertainty
- Courtney Herb, AdRoll: “Retargeting is a lifeline, but now’s the time to invest in brand visibility while CPMs are low.”
- Strategic long-term branding could benefit brands post-recovery.
Evolving Platform Dynamics
5. TikTok Ad Prices Rebound
- TikTok’s CPMs surged in March and peaked in April, nearing 2024 levels.
- Advertisers continue investing despite regulatory uncertainty in the U.S.
6. Google Delays Cookie Phase-Out
- Google pauses its plan to eliminate third-party cookies.
- Offers temporary relief, but long-term shift to privacy-first targeting remains inevitable.
- Marketers are urged to avoid over-reliance on outdated tracking methods.
The Rise of AI and Connected TV
7. AI Mode Redefines Search Experience
- Google’s AI-powered search introduces conversational “AI Mode” and “AI Overviews” with integrated ad placements.
- Traditional organic click-through rates down 30% as user behavior shifts.
8. Strategic Implications of AI in Search
- Brands must adapt SEO and ad strategies to compete within AI-generated results.
- Calls for experimentation with new ad formats that align with AI-driven search journeys.
9. Cross-Platform and Full-Funnel Strategies Gain Ground
- Marketers are advised to diversify beyond legacy search and social.
- Cross-channel strategies, including connected TV (CTV), become essential.
10. CTV Integration Drives Purchase Intent
- According to George Castrissiades (AdRoll), integrating CTV with broader campaigns can boost purchase intent by 11%.
- CTV offers impactful reach and brand lift, especially when combined with performance channels.
AdRoll’s Q2 2025 report reveals a rapidly evolving advertising ecosystem shaped by economic forces, emerging technologies, and platform innovations. While CPMs decline and consumer confidence dips, marketers must stay agile—balancing performance marketing with long-term visibility strategies. The rise of AI-powered search and the resurgence of connected TV signal the need for holistic, full-funnel campaigns that resonate across channels and devices.