AdRoll, an AI-powered connected advertising platform, released the Q3 2025 edition of its State of Digital Advertising Report. The report reveals that digital ad demand is rebounding just as generative AI begins reshaping holiday shopping, creating both urgency and new challenges for marketers.

Display ad costs, measured by cost per mille (CPM), showed significant recovery in Q3. Display retargeting CPMs narrowed their year-over-year decline from 18% in Q2 to just 3% in August, while display prospecting CPMs improved from 31% below last year in Q2 to 14% below in early Q3. The trend signals growing advertiser demand heading into the holiday season.

In contrast, account-based marketing (ABM) campaign CPMs declined further, widening from 11% below last year in Q2 to 20% below in Q3. While some of the decline reflects normal summer slowdowns in B2B advertising, the drop may also point to marketers exercising budget caution amid economic uncertainty.

At the same time, consumer discovery behaviors are being transformed by generative AI. Traffic from AI engines such as ChatGPT, Gemini, and Perplexity to U.S. retail sites surged 4,700% year-over-year in July 2025. More than half of U.S. consumers have already used or plan to use generative AI engines for shopping this year, whether for generating gift ideas, researching products, or finding deals.

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“As generative AI transforms search, marketers can no longer depend solely on website traffic to drive discovery,” said Vibhor Kapoor, chief business officer at AdRoll. “Channels like connected TV and other brand awareness tactics are becoming essential to ensure brands remain visible and memorable. Especially ahead of the holiday season, the companies that invest early in building recognition will be the ones that win when purchase decisions are made.”

With September and October projected to capture more sales than November and December, waiting until the traditional peak season could mean missing a significant share of spend. At the same time, the rise of generative AI is reshaping product discovery, making it critical for brands to invest in awareness strategies and AI-powered campaign optimization to ensure visibility in these new shopping journeys.

For B2B marketers, Q4 is equally pivotal, not for holiday promotions, but for influencing next year’s budgets. Launching account-based marketing campaigns in September and October, when CPMs are relatively low, can help ensure products and services remain top of mind as decision-makers finalize 2026 plans.

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