With digital ad spending soaring to $526 billion in 2024, up 10.3% year-over-year, AI marketing solutions are reshaping budget strategies.
This BoostMyDomain article compiles insights from business leaders and digital growth professionals on whether this growth will continue or decline in 2025.
Experts largely predict rising spend, driven by AI’s precision targeting, real-time optimization, and ability to unlock new channels like TikTok or programmatic platforms.
They highlight measurable ROI boosts, from 2.1x to 4.3x in eCommerce, while cautioning that AI complements, not replaces, strategic fundamentals.
However, some foresee a shift toward earned media as AI-driven search prioritizes credible content, suggesting smarter allocation over blanket increases in ad budgets.
Read on!
Personalization Drives Higher Ad Investments
I believe the growth will continue. Artificial intelligence is enhancing the precision and automation of digital advertising.
By leveraging AI tools, marketers can better understand user behavior, segment audiences more effectively, and deliver personalized content at scale.
More and more advertisers are willing to invest larger budgets in AI-driven digital marketing campaigns, confident that the return on investment will justify the spending.
Seann Malloy
Founder & Managing Partner, Malloy-Law
Scalability Reduces Waste, Grows Budgets
The expenditure for digital advertisement touched $526 billion dollars in the year 2024 which is higher by 10.3% and this percentage might grow even higher in the next year.
Artificial intelligence has been able to bring down the cost per acquisition but despite that fact spending analysis shows an upward trend. Now the question that arises is what is the cause behind this ? Artificial intelligence is the answer, AI makes marketing solutions and campaigns lucrative, diversifying the market reach and opening along with operating several channels for expanding business simultaneously.
Artificial intelligence helps small and medium scale businesses by helping them to advance their digital advertisement techniques and management of digital campaigning.
The big business houses on the other hand are also integrating artificial intelligence backed advertising which makes the budget higher. With the onset of artificial intelligence it has become possible to limit wastage and promote scalability which often leads to a higher expenditure when it comes to digital advertisement.
The year of 2025 is expected to witness a higher expenditure in digital advertisement which is backed by artificial intelligence and other advanced strategies and technologies.
Pankaj Tuteja
Head of Operations, Dragon Sourcing
Optimization Increases Spend, Enhances ROAS
AI marketing solutions won’t reduce ad spend directly – they’ll make every dollar work harder. What we’re seeing at Setsail is a shift away from broad, bloated budgets and toward precision deployment.
Clients aren’t spending less – they’re spending smarter. AI is speeding up creative testing, tightening audience targeting, and flagging underperforming segments in real time.
That means brands can push budget into what’s working without burning through months of manual optimization. After all – if the ROAS is 6x+, you’d want to pump it up to the max levels as long as it’s a positive investment!
We expect digital ad spend to keep rising in 2025—but the winners will be the ones who combine AI with strategy, not just automation alone.
AI gives you efficiency (where your strategist sifts through massive amounts of data quickly), but it doesn’t replace the fundamentals: good offers, smart funnels, and a clear customer journey. Those who get both right will scale faster than ever.
Jason Atakhanov
Founder, Setsail
Smarter Tools Drive Ad Investments
Companies are still sorting out where AI fits in the budget. Is it a development expense? An operational tool? A marketing line item? While that’s being debated, one thing is clear: digital ad spend keeps growing because that’s where the audience is.
Couple that with the fact that AI automation promises to make it easier to launch, test, and optimize campaigns, and we could see a perfect storm where digital ad spend increases substantially in 2025 and 2026.
AI is making it easier to personalize ads at scale, create content and creative faster, and iterate without waiting on other departments, teams and budgets.
AI hasn’t reduced the need for advertising. It has just made marketers better at it. If anything, AI is helping companies get more value from every dollar, and they’re putting those dollars where people are: online.
Ryan Burch
Founder & Owner, Tobie Group
Search Shifts Budgets to Earned Media
As companies recognize the growing influence of generative AI in fulfilling consumers’ search needs, they will spend less on digital marketing.
Since LLMs like ChatGPT and Claude are informed overwhelmingly through credible, non-paid online sources with well structured, factual content, we will see smart brands increase their PR budgets as earned media coverage becomes even more valuable.
Hilary Reiter Azzaretti
President & PR, Redhead Marketingpr
Enhanced ROI Grows Ad Spend
AI will drive spending higher, not lower. From building PacketBase from zero to acquisition and now running Riverbase Cloud, I’ve seen how AI actually increases marketing investment rather than reducing it.
The reason is simple: AI doesn’t replace ad spend—it makes it more effective. When we launched our Managed AI Method, clients started investing more in campaigns because they could finally see predictable returns.
One eCommerce client doubled their ad budget after our AI optimization increased their ROAS from 2.1x to 4.3x. AI also opens new channels that weren’t profitable before.
We’re running successful campaigns on TikTok and programmatic platforms that would have been impossible to manage manually at scale. The precision targeting and real-time optimization means businesses can profitably spend in markets they previously avoided.
Expect that $526 billion to grow significantly in 2025. Companies aren’t cutting budgets when AI is delivering measurable results—they’re reallocating from underperforming channels to AI-optimized campaigns that actually convert.
Founder & Principal Analyst, Riverbase
Healthcare Ads Gain Efficiency, Scale
AI marketing solutions will absolutely drive spending higher in 2025, but the money will shift to smarter channels. When I helped my husband’s medical practice hit $239K in 90 days, we used AI-powered targeting to identify referring physicians within his non-compete restrictions—something that would have taken weeks of manual research.
The real game-changer isn’t replacing human strategy, it’s accelerating execution. AI helped us analyze which social media posts drove actual patient appointments versus just likes, letting us double down on content that converted.
We cut our design time by 60% using AI tools while maintaining the personalized touch that medical practices desperately need.
Healthcare marketing is notoriously behind on tech adoption, but practices using AI for patient communication and referral tracking are seeing 3x better ROI than traditional methods. The spending isn’t just growing—it’s getting more effective, which means businesses will invest even more as they see results.
Ashley Gay
Founder, Digital Ash Agency
Effective Targeting Boosts 2025 Ad Spend
I’ve watched AI marketing solutions drive spending UP significantly, not down. Running Security Camera King to $20M+ annually, we saw our Google Ads costs actually increase 35% this year as AI bidding became more competitive across our industry.
The key shift is AI makes advertising more effective, which attracts more advertisers to the auction. When we helped local businesses implement AI-driven GBP optimization, their conversion rates jumped but so did their willingness to spend more on ads that actually worked.
Businesses are realizing AI doesn’t replace ad spend—it makes every dollar work harder. Our clients averaging 300%+ ROI are reinvesting those gains back into more advertising, not cutting budgets.
Expect 2025 spending to climb even higher as AI tools become standard. More effective targeting means more businesses will jump into digital advertising, driving that $526 billion figure up substantially.
Damon Delcoro
Founder & CEO, UltraWeb Marketing
On behalf of the BoostMyDomain community of readers, we thank these leaders and experts for taking the time to share valuable insights that stem from years of experience and in-depth expertise in their respective niches.
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