The overall digital advertising landscape is changing at breakneck speed, fueled by top ad platforms like Amazon, Facebook/Meta, Google, and TikTok. There is no doubt that the sector is becoming more complicated with each passing year and as we move into 2025, advertisers are struggling to keep up with the ever-changing trends. At the same time, they also desire a good return on their investment and better insights into campaigns not just for the short term, but the long term as well—not to mention if the campaign is driving conversions and increasing qualified traffic.

The exponential growth in the digital ad sector can be seen over five years, with U.S. revenues topping $270 billion in 2023 and projected to grow to $450 billion by 2028. Reaching consumers online is more critical than ever. As we hurtle toward yet another new year, here are some anticipated digital advertising trends to watch in 2025 that address many of these challenges.

The Rising Importance of Amazon Ads and AMC and Amazon DSP

It’s no secret that Amazon has rapidly become a dominant force in the digital advertising space, its ad business outpacing competitors including Meta and Alphabet. In Q1 2024, Amazon’s ad revenue reached $11.8 billion, a 24% increase year-over-year. This growth has been driven in large part by the expansion of Prime Video ads and the proliferation of sponsored product ads.

The company’s analytics platform, Amazon Marketing Cloud (AMC), helps advertisers perform advanced analytics and build audiences. Along with ensuring data privacy, AMC lets marketers create bespoke audience lists utilizing engagement records, conversion events, and segment information. Delivering richer insights by connecting signals from Amazon Ads and third-party providers, AMC provides an in-depth, holistic view of customer journeys across Amazon Ads media and channels, quantifying ad impact both online and offline.

With its assets, AMC will become increasingly essential for marketers to refine their strategies, target audiences, drive personalization, and optimize campaigns across the customer journey, making better data-driven decisions to improve ROI.

However, there is more to the story as we enter into 2025. Many marketing professionals believe that Amazon advertising is just for Amazon but the company is also hoping to capture advertising spend beyond Amazon.com, including where other players like Tradedesk, Google’s DV3600, and others are. For this reason, Amazon’s importance is rising. Key to achieving this goal is Amazon’s demand-side platform (DSP). Amazon Prime Video Ads are only accessible through Amazon DSP, therefore marketers today will have no choice but to use the platform. As Amazon Prime Video ads become more attractive to marketers, their use of Amazon DSP will increase.

Once Amazon DSP gains regular users, investment in the platform should grow as its tools and quality expand. Lately, Amazon’s demand-side platform (DSP) has been updated to include new frequency cap controls and reporting to simplify frequency management.

The New Cookieless World – How to Explore Alternative Methods for Obtaining Metrics

The advertising landscape is undergoing a significant shift as the use of cookies, which has long been a staple for tracking user behavior and measuring ad performance, is being phased out by major ad platforms such as Google and Meta. This will pose a significant challenge for advertisers and agencies in obtaining accurate and unbiased conversion data.

Therefore, in 2025, advertisers need to explore alternative methods for obtaining comprehensive metrics across all ad platforms. One approach is to leverage third-party measurement solutions, such as Market Mix Modeling (MMM), or incrementality testing. These tools can provide valuable insights into ad performance and ROI without relying on cookies.

Additionally, advertisers need to rely on unified conversion data from third-party measurement tools to inform their budget allocation across ad platforms. This involves consolidating data from different measurement solutions into a single source, allowing for accurate and consistent evaluation of performance and ROI – providing a holistic view of the customer journey.

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Shifting Focus from ROAS to Lifetime ROAS

Return on ad spend (ROAS) has traditionally been considered the gold standard for measuring the financial return of ad campaigns. Its primary focus is on short-term revenue, however, it doesn’t consider either customer lifetime value (LTV) or new user acquisition, while indiscriminately mixing both new and existing customer conversions in its ROAS calculations. This narrow focus may please clients with immediate results but can overlook opportunities.

In contrast, Lifetime ROAS is emerging as a more holistic metric that assesses the value of acquiring new users as well as the long-term engagement and profitability of customers. By estimating the total revenue that a new customer can generate over their entire relationship through advertising efforts, Lifetime ROAS offers a far more comprehensive view of the advertising campaign, allowing marketers to foresee the long-term impact of their efforts to make more strategic decisions and drive not only immediate profits but growth long-term ones.

Calculating Lifetime ROAS is now a viable option for marketers as they can associate ads’ conversion data with actual purchase or revenue data from e-commerce or CRM platforms like Shopify and Salesforce.

Rise of the Black-Boxed Advertising Campaigns – the Good, the Bad, and What Advertisers Can Do

With the rise of machine learning and AI-driven ad campaigns, like Google’s Performance Max and Meta’s Advantage+ shopping campaigns, much of the campaign optimization is handed over to algorithms. As such, marketers may lose direct control over individual ad placements, and targeting decisions, with the platforms recommending or even automating many key aspects.

Marketers feel like they’re working within a “black box” because they don’t have full transparency into how these platforms make decisions about ad delivery, budget allocation, audience targeting, and performance measurement—limiting their ability to make fully informed optimizations.

For example, if you only run a Google PMax campaign, advertisers may not see the whole picture, such as the breakdown from Search, Display, and more.

Additionally, PMax may provide information that shows the campaign is getting an abundance of conversions and leads, not to mention a lower cost per click. On the backend, marketing pros may not be getting the customers they want or need. Understanding which advertising channels and keywords are most effective at acquiring desired customers is critical – but these are not the analytics that PMax will provide.

Leveraging AI-driven campaigns like PMax to expand reach is undoubtedly beneficial. However, it is even more critical for marketers to effectively manage traditional campaign types—such as branded and non-branded searches, display, YouTube, and more while consistently analyzing and understanding the customer segments attracted by each campaign.

Properly managing traditional campaign types, combined with the use of advertising management tools integrated with CRM systems or e-commerce platforms, provides deeper insights. These tools allow access to data on converted customers’ attributes and their impact on revenue, enabling advanced analysis and calculations. This approach empowers marketers to evaluate campaign performance, gain a better understanding of customer behavior, and identify the specific elements driving revenue growth. Ultimately, this leads to optimized new customer acquisition strategies and improved lifetime ROAS.

Trends may come and go as business and technology evolve, of course, but what will never go out of style is the importance of staying agile, data-driven, and innovative in an increasingly complex advertising world.

Mitsunaga Kikuchi is founder and CEO of Shirofune, the digital advertising management tool that automates ad campaigns through an easy-to-use interface for management, budgeting, monitoring and analytics.

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