The Advertiser’s First-Party Data Pyramid: From Scarce Seeds to Scalable Signals
November 11, 2025
The big debate in digital advertising is now focusing on the likely growth rate in 2026, in the midst of a potential global economic slowdown, the rise of AI, and the ongoing dominance of the mega players, Google, Meta, and Amazon.
All eyes are on the US$140 billion digital advertising market as the U.S. sets the pace and direction for global adspend. There are reasons to be optimistic, even as the turbulence of AI threatens to disrupt traditional media buying.
In September, Madison and Wall, a consultancy, said the US advertising market, in the second quarter of this year, grew approximately 10.3% excluding political advertising (and 9.1% including it). The consultancy also said for the US, six of the past seven quarters have featured annual underlying advertising growth of around 10%, which is a remarkable feat for a low-ish inflation economy, considering the economy only grew in a range of 4-6% in nominal terms during that period.
“We can provide informed speculation on why this has been so: competitive intensity among marketers within categories rises with most digital advertising – best illustrated in retail media, where a market with only 5% underlying spending growth for e-commerce by consumers translated into a 24% gain in spending by advertisers,” Madison and Wall wrote.
In a recent report by Warc, it’s also clear that retail media’s role in the mix is changing. “Commerce media is emerging as a full-funnel solution, with more ad formats and channels to complement granular first-party data. A recent survey by ad-tech company Infillion found 40% of agency-side executives who buy retail media see it as a full-funnel solution, and another 7% agreed it is an upper-funnel opportunity,” a Warc report on retail media noted. In another report released just before the start of the fourth quarter, eminent research firm Sensor Tower said competition within the digital economy is still intensifying as new players enter the market, brands across verticals boost their ad spend, and marketers turn to AI to sharpen their edge. United States ad spend hit $137 billion in 2025, up 12% from the previous year, and impressions rose seven percent to 16.3 trillion.
The research firm predicted that social platform adspend will reach new highs in the fourth quarter.
“Social ad channels like Facebook, YouTube, and TikTok accounted for the majority of digital ad spend in the United States,” Sensor Tower said in its State of Digital Advertising Report, 2025.
“Advertisers tend to boost their ad spend heading into the US holiday season, and as a result, ad spend across social channels is projected to reach $10 billion each month in Q4 2025.” Meta controls 65% of all US social adspend, the research firm noted.
The Rise of AI solutions
The market researcher also noted that some forms of AI were now transforming the ad landscape.
“AI isn’t just transforming products; it’s fundamentally reshaping how companies reach their audiences. Marketing AI features now extend well beyond Generative AI brands like ChatGPT and Microsoft Copilot. Brands across various verticals are actively using their ad creatives to promote the latest AI features and underlying technology.”
Over the past two years, US advertisers have more than quintupled their spending on AI-related messaging. These creatives are not merely hype; they are effectively meeting audiences where their curiosity lies: in searching for innovative AI tools, solutions, and capabilities.
In late November, Digiday reported that ad spend in the fourth quarter was in a wobbling phase, though the ad industry should not be concerned that a dramatically slow 2026 was imminent.
“It seems mixed signals are all over the place in the fourth-quarter ad marketplace, with some media buyers reporting a recent drop off in ad spend from a number of categories, while others acknowledge a slowdown but not of any amount that rings alarm bells for 2026,” Digiday said. Instead, it may turn out to be a softer first quarter, after some of the gains made in the middle of this year.
“That reality has led to reports of some publishers and sellers offering incentives to land more business (and hit 2025 sales goals), including beta-testing opportunities. And if historical precedent is to be believed, the instability impacting the market today could easily usher in a Q1 2026 that’s softer than the momentum needed to make the year a winner for brands, for publishers and for agencies,” the publication added.
The Open Web Challenge
As for the Open Web, there remains a strong heartbeat of activity beyond the walled gardens of Google, Meta, and Amazon. Even though Amazon, Google, and Meta continue to dominate, their share of US digital media adspend has dipped over a five year period, from 73.9 percent to 71.9 percent, said eMarketer.
Google’s and Meta’s market share shift is more noticeable with Amazon out of the equation, analysts say.
“Amazon has been riding the retail media wave over that [2020-2025] period,” said eMarketer analyst Eleni Digalaki, “Google and Meta have seen their share drop by roughly six percentage points over the last five years.”
In terms of the big picture for next year, as Pwc recently pointed out, “throughout the world, advertising - especially digital advertising - is flowing into new areas within continually evolving platforms.” The media dollars will surely increase in streaming TV, mobile, retail media, and all forms of short video spend.
The recent shift from direct-response conversion spend to higher funnel brand spend indicates that advertisers are seeking to increase their pricing power, before the LLM-fueled AI search movement takes hold.
During winter in the US, many brand leaders will be assessing how they can create autonomous product buyers, aided by AI. Their chief technology concern will be how to combine machine learning, rich data inputs and agentic AI, to positive effect. Once that train has the green light from media buyers, a whole new level of growth could be unlocked.