LUMAispleasedtopresentour2025StateofDigitalreport·

In2024,wetalkedaboutthemacrolandscapecontinuingtobearollercoasterandhowsuchuncertainty

hamperedM&Aactivity.WetalkedaboutAIbecomingautility,likearailroad.Wementionedgovernments

increasingeffortstooverseeBigTechwithinboththeUSandEurope.Wenotedthattheperformanceof

publiccompanyAdTechrevenuegrowthwasimprovingsubstantially.Lastly,welaidoutaframeworkto

contextualizethemarket:“Survive,Revive,Thrive”-survivethedepthsof2023,returntogrowthin2024,andthengetsettoThrivein2025.

Well,wegotafewthingsright.

Themacroenvironmentdidimprove,interestratescamedown,inflationcamedown,andthestockmarket

respondedpositivelyin2024.

AIbecameabsolutetablestakesformarketers.Bestoflucktothose6%ofmarketerswiththeirnextjob.

Revenuegrowthcontinuedtobestrongquarterafterquarterandsofar,withthepubliclyannouncedearnings

inQ1of2025,growthcontinuestolookhealthy.

Aspredicted,M&AactivityrosesubstantiallywithnumeroustransactionsacrossAdTechandMarTech.

Thegovernmentcontinuesitscrackdown,securingcasevictoriesagainstGoogleandApple,andappearsdeeplyengagedinpursuingfurtherwinsagainstBigTech.Europehasseveralantitrustinitiativesaswell.

Andofcourse,themostconsequentialcaseforthisecosystemistheAdTechlawsuitagainstGoogle.We

wouldarguethateverypotentialconstituencybenefitsifGoogleisultimatelyrequiredtodivestwhatisarguablyitslowest-growth,lowest-margin,andmosttroublesomebusiness,includingGoogle.

We’reseeingnewentrantsrampingup.Somecompaniesareacceleratingtheireffortsthroughacquisitionsor

byexpandingtheirinitiativesinadvertising,whileothersarewell-positionedtomoveintothespace.Notably,OpenAIjusthiredFidjiSimo,formerlyofInstacartandFacebook.Givenherdeepadvertisingexperience,thatmoveseemsparticularlytelling.

So,theThrivewashappening.AdTech,MarTech,andtheNasdaqwereallupsubstantiallyuntilFebruary.The

announcedUStariffsonCanadaandMexicoandthenallcountriesaddedsignificantuncertaintytothe

markets,erasingayearofpublicmarketgains.WewouldnotethatthemarketshavereturnedsignificantlyoverthepastseveralweeksleadinguptoDMS.

Let’sthinkaboutwhattheimpactofadraconiantariffregimemightbe.Yes,there’stheshockandaweofthemarket

reaction,butperhapsthebiggestconcernisthehittobusinessconfidence.Weareencouragedbytherecenttariffdeals,butifthosedon’tfurthermaterialize,substantialtariffscoulddisruptthesupplychain,whichmayultimatelyimpactadvertisingspend.Onthepositiveside,allthemajortrends?AI,CTV,commercemedia,andmedia

fragmentation?remainfirmlyinplay.Andhistorically,majornegativedisruptions,haveoftenacceleratedthem.

EveryyearasweprepareourStateofDigitalwereflectonthemostimportanttrendsimpactingthe

ecosystem.Oftentheseendupbeingdrivenbyspecificchannels(openweb,CTV,CommerceMedia,etc.),withdiscretetrendsdrivingeach.

Thisyear,weobservedthatinfacttherearethreecoreandintertwinedforcesthataredrivingtheentire

industryforward,regardlessofchannel:theProliferationofAI,theShifttoOutcomes,andEvolvingMediaConsumption.

EvaluatingthepotentialapplicationsofAItoadvertising,wetendtothinkofthemwithinahierarchy.Atthe

base-levelyouseedailytasksandfunctions,suchasworkflow,audiencedata,measurement,andmedia

buying.OnecoulddescribeAIassoftwarethatoptimizestheseexistingtasksprimarilyforefficiency.ThenextlayerinvolvesAIsoftwaredesignedtoenhancebothefficiencyandeffectivenessacrosscontent,adcreatives,andcommunication.Nextupisalayerwhichrepresentsanewconsumerinterfacethathasthepotentialto

completelyreconstructsearchandinternetnavigation.Lastly,istheunknownunknowns.WhatarepowerfulAIsolutionsthatwehaven'tquitethoughtofyet?

WithrespecttotheLLMs,themajorplatformshavelargelybeensubscription-basedbusinessmodels.We

believeit'sinevitablethattheywillleanintoadvertisingandcommerceduetotheirmassiveuserengagement,richintentsignals,andhighpersonalizationpotential.Thesecompaniesraisedhundredsofbillionsofdollarsandwillneedtodemonstratethattheycanmonetizeallthattimeandattention.We'reseeingearlymovers

andbelievenextyearwe'llbetalkingaboutthesubstantialinitiativesoftheseplatformsastheyexpandintothesenewrevenuestreams.

AsitrelatestoproductizationofAIinAdTech,wehaveseenthesetendtomanifestintwoforms:CoPilots(humanscompletingtaskswiththeassistanceofAI)andAgents(humansdelegatingtaskstoAI).

OneofthebiggestopportunitiesinapplyingAItoanysectorisbringingefficienciestotheworkflow/human

serviceselementandadvertisingiscertainlynoexception.Advertising,asanecosystem,isheavilyservice-orientedandpeople-driven,withspecializedteamshandlingplanning,targeting,buying,optimization,and

reporting.Whiletheseteamsmaycommunicate,theirworkisoftensiloed,withplentyofmanualprocessesthroughout.

OnecaneasilyimagineaworldwhereAIre-shapesthisdynamic,onethat’snotonlyhighlydisruptiveto

existingteamstructures,butalsoincrediblypowerfulinstreamlininghowworkgetsdone.Bydeploying

intelligentagentsacrossthesetraditionallysiloed,humanworkflows,theentireadvertisingprocesscouldbecomesignificantlymoreintegrated,efficient,andeffective.

existingteamstructures,butalsoincrediblypowerfulinstreamlininghowworkgetsdone.Bydeploying

intelligentagentsacrossthesetraditionallysiloed,humanworkflows,theentireadvertisingprocesscouldbecomesignificantlymoreintegrated,efficient,andeffective.

OnecaneasilyimagineaworldwhereAIre-shapesthisdynamic,onethat’snotonlyhighlydisruptiveto

We’reallfamiliarwiththeJeffBezosquotethathasbecomeemblematicofAmazon’sstrategy,“YourMarginis

myOpportunity.”InaworldofAIintersectingwithAdvertising/AdTech,weseeservicesbecomingthefocalpointfordisruptionanddisintermediation.Saidotherwise,“YourServicesaremyOpportunity.”

DataiscriticaltoAI,andwehavebeentalkingaboutthistrendofthird-partydatashiftingtofirst-partydataforthelastfiveyearsastheecosystempreparedforaworldwithsignificantlyless3rdpartydata.

AfterfiveyearsofbeingtoldbyGooglethatcookiesaregoingtogoawayimminently,infacttheyarenot.

DespitethischangeinGoogle’sposition,theecosystemhasmovedon,andwhethercookiesarehereornot,justdoesnotmattertotheecosystemanymore.

Thistrendtowardsfirst-partydataisnotreversing,despiteGoogle’srenegeoncookiedeprecation.Platforms

havealreadyrealizedtheimmensevalueoffirst-partydata.Organizationsareincreasinglylearninghowtoharnessboththedatatheyownandthesignalstheycancapturemoreefficiently.Themomentumisstill

strong,andwecontinuetomovesteadilyinthisdirection.

TheconvergenceofAIwiththebroadermovetofirst-partydatacouldn’tbebettertimed.WithoutAI,thisshift

wouldbefarmorechallenging,particularlyasweshifttowardleveragingmoreprobabilisticsignalsinmeasurementandadbuyingoptimization.Probabilisticmethodologiescanbeincrediblycomplexandhistoricallyslow,howeverwhencombinedwithAI,we’reseeingwhatfeelslikeatrueprobabilistic

renaissance.

AsyoumoveuptheAIhierarchy,youreachthelayerswherebenefitstoefficiencyandeffectivenessbecome

critical—andCreativesitsrightatthecenterofthat.Ontheproductionside,Creativehastraditionallybeenahighlymanualprocess,butwiththeriseofGenerativeAI,there’stremendouspotentialtostreamlineandscalecontentcreation.Moreimportantiswhathappensbeneaththesurface,whereAIpairedwithCreativeData

candrivegreatereffectiveness.AIenablesrapiditeration,precisecontextualalignment,andpersonalizationatscale,ensuringthatCreativenotonlylooksgoodbuttrulyresonateswiththerightuserintherightmoment.

Anothertrendwe’vebeenseeingisashiftinhowbrandscommunicate,movingclosertowhereconsumers

arealreadyspendingtimevs.drivingthemtoalandingpageorsite.AIwillplayacriticalroleinenablingthis

transition.Traditionally,brandshaveengagedwithcustomersacrossvarioustouchpointsthroughpaid,owned,andearnedmedia.Thinksearch,social,pushnotifications,SMS?alltypicallydesignedtodrivetrafficbacktoonecentralhub:thebrand’swebsite,wheretheyhavefullcontroloverthemessageandexperience.

WiththeriseofAI,brandsnowhaveagrowingopportunitytoengageintrueone-to-oneconversationswith

customerswheretheyare–onSocialandMessagingplatforms.Thismeansnotonlycollectingvaluable

informationanddeliveringpersonalizedcontent,butinsomecases,alsotransacting.Thesuccessof

Manychatisemblematicofthistrend.LUMAadvisedManychatonit’srecentlyannounced$140mmSeriesBfinancingledbySummitPartners.Manychatpowerstheseinteractionsforbrands,creators,andprosumerstocommunicatetheiraudiencesontheplatformsthoseconsumersspendtime(socialappsandmessaging).

Theverdictisclear:sometimesnewtrendsappearasshinyobjects,onlytofadewithoutdeliveringreal

impact.AI,however,isnotoneofthosetrends.Itisatruegamechanger.

Infact,MarkZuckerbergwentevenfurther,suggestingthatAI-drivenproductivitycouldmakeadvertisinganevenlargercontributortoGDP,transformingarelationshipthathasremainedstablefordecades.

Thereremainopen-endedquestionsaroundthepotentialdisruptiveimpactsofAIontheindustry.

IPcredit?whogetsthecreditforanAIsummarythatutilizesIPcontentifthepublisherdidn'tcutalicense

deal?Agenticgovernance?whatguardrailsdoweputontheagentsthataregoingto(autonomously)

completetasksandworkflowsonbehalfofecosystemconstituents?Search/WebDisruption–whataretheimplicationsforthepublisherecosystemshouldthetopofthefunnelshiftentirely?Lastly,theInnovator’s

Dilemma–howdoincumbentsembracethistechnologywhilealsoensuringtheviabilityandsuccessoftheirexistingbusinesses?

ThereisanarrativethatsuggeststhisconflictinAdTechbetweenAI-Firstcompanies(David)andthescaled

AdTechincumbents(Goliath).ApervasivesentimentisthattheseAI-Firstcompaniesaregoingtotherendertheincumbentcompaniesuseless.Yes,they'regoingtobedisruptivebutsuggestingtheywillkillincumbentsignoresoneofthesinglemostpowerfulforcesinbusiness:inertia.

We’vespentalotoftimethinkingaboutwhattrulydrivessuccessforAIinthisspace.Atitscore,youneedthe

AIengineorproductitself,whichinturnrequiresdata—thelifebloodofAI.Whilethesetwocomponentsareessentialtogetstarted,asnoted,inAdTech,theydon’tmeanmuchwithoutaccesstobothDemandand

Supply,andideallyatscale(thisiswhereinertiacomesin).ScaledDemandand/orSupplyaccessarecrucialforeffectivelyapplyingandleveragingAI,astheycreateacontinuousfeedbackloopthatfuelsfurtherdataintothesystem,addingvaluetotheAIengine.Thereareuniqueaspectstoallcomponentsofthisflow,from

variousdemandorsupplysideaccesspoints,touniqueAImodels,anddatastrategiesthatrangefromowningunique,valuabledatatoprovidingstrongdataprocessing/cleaningbuiltforAIutilization.

Itbecomesevenmoreinterestingwhenyouintroduceagentsintotheequation.Agentsareonlyeffectiveif

they’refullyintegratedintotheecosystem.Theyneedtobeabletointeractwiththeunderlyingsystemsandadjustthenecessaryparameterstobeeffective.

However,ifyouhaveAIoragentsrunningcriticaladvertisingfunctions,bothdemandandsupplyneedtotrust

thattheplatformisrunninginthebestinterestofthecustomerandisworkingcorrectly.Gainingtrustand

alreadyhavingscaleiswherethesecoincidingforcesbecometrulypowerful.Scalebringsinawealthofdata,whichfeedstheecosystemanddrivesgreaterimpact.We’realreadywitnessingthiswithmajorplatformslikeGoogle,Apple,andAppLovin,wheretheirshifttowardAImodels,evenatscale,hasenabledthemto

significantlyaccelerategrowth.Whiletheremaybe“trust”concernsbroadlyrelatedtotheseplatforms,forthemarketersleveragingthesystems,thereiscurrentlysignificanttrustindrivingresults.

Giventheseevolvingdynamics,theonlyoptionistoleanin.OuradviceasitrelatestoAI:BuildFastorBuy

Fast.Youneedtogettomarketquickly,becauseifyoudon’t,yourcompetitorswill.

AIhasthepotentialtosubstantiallyshortenthestartuplifecycle.Traditionally,buildinginfrastructure,sales

teams,andago-to-marketstrategycouldtakeanywherebetween5to10+years.However,AIstartupscanaccomplishthisinafractionofthetimeandwithsignificantlylesscapital.AgreatexampleofthisisPerion’srecentlyannouncedacquisitionofGreenbids,anAI-enabledmediabuyingoptimizationbusinessthat

launchedinlate2022.

TheOutcomesEraishereandrepresentsanimprovementtothehistoricalproxy-basedapproach.

We’vebeentalkingaboutthisforover10years.Theadvantagesofmigratingtowardaperformancemodelare

twofold.First,ithelpsmitigateissueslikefraud,bots,andviewability.Whenyou’reonlypayingfortheoutcome,thoseconcernsbecomelessrelevant.Second,itcreatesamuchstrongerbusinessmodelbycombiningscaleandautomationwhichboostsoperatingleverage.

Backin2018,wediscussedafundamentalshifttakingplace.Gamerswereamongthefirsttounderstandthe

relationshipbetweenCACandLTVandapplyittomarketing.Soonafter,appmarketersandthendirect-to-

consumerbrandsadoptedthisoutcome-basedapproach.Wepredictedthateventuallyallmarketerswould

followsuit,treatingperformanceadvertisingnotasadiscretionaryexpense,butmoreasacostofgoodssold.

So,whyisthisshiftacceleratingnow?It'sacombinationoffactors:achangingdatalandscape,increasing

advertiserdemanddrivenbyCMOspushingforaccountabilityandefficiency,publisherneedfornewdemandsources,and?mostimportantly?theenablementprovidedbyAI.

Muchofthistransformationwastriggeredbythecollapse(oranticipatedcollapse)ofthird-partydata.This

shiftforcedmanyofthetopadvertisingplatformstoadoptnewstrategies,whichultimatelymovedthemoffbottomfunneldeterministicmeasuresandforcedanewparadigmtiedtooutcomes.

Thiswasmostevidentinsomeofthemobileappplatforms,whoweredirectlyimpactedbythelossofIDFAas

AppleshiftedtoiOS14.TheneartermimpactoncompanieslikeMeta,AppLovin,andGooglewassignificant.ButtheyadaptedquicklybypivotingtoAIandembracingmoreprobabilistic,deep-learningmodelstopredictoutcomesandmeasurebasedonConversionAPIs(CAPIs),ratherthansimplyrelyingondeterministic3rd

partytracking.

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Historically,deterministicmeasurementwasthedefault.Itwassimpleandconvenient,focusingonbottom-of-the-funnelmetricslikelast-clickattributionand(MTA)models.Theseapproachesworkedwellforplatforms

thatcouldsupportthem,buttheyalsocreatedsignificantproblems.Theyintroducedperverseincentives,wereeasilymanipulated,whichoftenencouragedbehaviorsthatdidn’talignwithtrueperformanceorlong-term

value.Inshort,itwasn’tanidealorsustainablewaytooperate.

Meanwhile,probabilisticmethodshavealwaysbeenpossible,thoughtheyweredifficulttoadoptatscale

becauseoftheircomplexity,costandtimeintensive-nature.Theyrequiredpullingtogetherlarge,disparatedatasets,buildingcomplexmodels,andextractinginsightsandrecommendations,allofwhichwasslow,

expensive,and(mostcritically)disconnectedfromtheday-to-daymediabuyingandoptimizationprocess.

AIenablesprobabilisticapproachestobecomefaster,moreaccessible,andmoreintegratedintoreal-time

mediabuying.Asaresult,methodologieslikeMMMandIncrementalityarebecomingfarmorepracticaland

scalable.That’swhywe’reseeingasurgeincompaniesfocusedonthisspaceandabroadershiftfromstaticinsightsandrecommendationstowardpredictivemeasurementandpredictivebuying.Asthesesystemsbegintoiterateandlearntogether,wemovetowardthenextfrontier:PredictiveOutcomes.

We’realreadystartingtoseethetraditionalboundariesbetweendata,measurement,andmediaexecution

begintoblur.Overthepastdecade,thesefunctionswerelargelyseparated?dataplatformssupplied

executionandmeasurementcompanies,measurementfirmshandledattributionandanalytics,andmedia

platformsexecutedcampaigns.Butthat’schanging.Ascompaniesre-evaluatehowtheyusetheirdata,

they’rerealizingthere’ssignificantvalue,notjustinanalyzingperformanceafterthefact,butinpushingdataandsignalsupstream,intothepre-bidandpredictivephasesoftheprocess.Thiscreatesopportunitiesto

drivetheoptimizationandcollapsessomeofthedistinctionsbetweenmeasurementandexecution.

We’veseenastrongtrendofcompaniesconvergingacrosstheAdTechstack.Executionplatformsare

lookingtoaddmoredataandmeasurementcapabilities,whilemeasurementcompaniesaremovingclosertooptimization.Injustthelastsixmonths,severaldealsreflectthisshift.

Broadlyspeaking,theshifttowardoutcomesisreshapinghowwedefineperformanceinadvertising.

Traditionally,performancewasseenasbottom-of-funnel,focusedonlow-costinventory,short-termactions,anddeterministicmeasurement.Meanwhile,brandadvertisingsatatthetopofthefunnel,emphasizing

awarenesswithhigh-valuemediaandrelyingonproxieslikereachandfrequency.

What’sexcitingnowistheopportunitytouseAIandprobabilisticmethodstobridgethatgap.

WiththecombinationofAIandProbabilisticmethods,wecanstartlinkingbrandsignalsdirectlytooutcomes,

usingpredictivecapabilitiestomakebrandbuyingmoreoutcome-driven.Ultimately,thismeansadvertiserscanmeasureimpactbasedonactualoutcomes,identifywhichKPIsarepredictiveofsuccess,andshiftfrombuyingimpressionsoraudiencestobuyingagainstKPIs?sometimeswithguarantees?alignedtobusinessresults.Long-term,thiscouldshiftalladspendtowardsacostofgoodssoldvs.adiscretionaryexpense.

Withtheshifttowardoutcomes,thedynamicbetweenCFOsandCMOsisevolving.CMOsareunder

mountingpressuretodemonstrateROI,atrendunderscoredbyarecentIABstudyshowingthat70%ofBrandsarefeelingpressuredtodemonstrateROI.

Whenconnectingspendtooutcomes,CFOsandCMOscancometogethertoalignonhowbesttoleverage

advertisingspendtodriverealbusinessresults.

EvaluatingthechannelsthatareleaningintoOutcomes,MobileAppstandsoutastheearlyadopterof

performancemonetizationanduseracquisitionmodels.TherearetwocriticalgrowthchannelsinDigital

AdvertisingthataresimilarlyleaningintoOutcomesinabigway:CommerceMediaandCTV.Commerce

Media,withitsclosetiestothetransactionisinherentlyoutcomefocused.Meanwhile,CTV,whichhistoricallyishistoricallyverybrand/awarenessfocused,isincreasinglybecomingaspaceforinnovationandgrowth

towardsOutcomes.EveryoneintheCTVecosystemisleaningintothisopportunity,bothtraditionalTVplayersandCTVfirstplatforms.

WithrespecttoCommerceMedia’sroleintheecosystem,youcan’tmeasureoutcomeswithoutvisibilityinto

transactions?youneedtoseethecommercehappening.That’sfundamentallythegoalofadvertising,andtheclosed-loopattributionenabledbyCommerceMediasignalsisincrediblypowerful.What’schangedoverthepastfewyearsisthepermissionstructure:companiesthathaveaccesstothesetransactionsignalsandcustomerrelationshipsarenowrealizingthey’reallowedtostartadvertisingdirectly.

ThesedynamicshaveenabledCommerceMediatoevolveintoamassiveindustry,generatingaround$60

billionofspendintheU.S.alone.Todate,muchofthisenergyhasbeenfocusedonO&Osolutions,wherebyretailersandothercommercecentricconsumerplatformshaveaddedadvertisingtotheirownuser

experience.

However,revenueisn’tevenlydistributed.Themajorityhasalignedtothetopplayers,suchasAmazonand

Walmart.Thesetwoplatformsareheavilyfocusedonowningthisspacefromafirst-partytechnology

perspective.Theyhaveshiftedfromprimarilymakingmoneyonthemarginsforsellinggoodstoconsumerstoonewherethetechnology/platformtheyprovidetobrandsisbecomingtheprimaryfinancialdriveroftheir

business.

Theremainingplayersaccountforroughly$9billioninspending.Manyofthesecompaniesenteredthespace

withgreatenthusiasm,butthatexcitementisbeginningtowaneastheyfacetherealitiesandchallengesof

operatingasmediacompanies.Themassfragmentationofthelong-tailofCommerceMedianetworks,pairedwithalackofstandards,lowdegreesofoptimization,andrelianceonthird-partyvendorsmakesitan

ecosystemripefor(andinneedof)aggregation.

Consolidationofmassfragmentationbecomesmoreimportantasyouthinkaboutthebiggeropportunityin

CommerceMedia?takingthatdataandmovingitoffplatform.Todriveoutcomesatscale,youneedtobe

tyingcommercesignalstoallthesedifferentchannels,notjustonO&OCommerceMedia.ExtendingdatatotheWalledGardens,CTV,andtheOpenWebenablesOmni-Channeloutcomesatscale,andthemajor

playershavebeendoingthis.

Amazonhasdonethisfromafirst-partytechnologyapproach.TheyhavetheirownDSPandareinvesting

heavilyintogrowingtheirmarketpresencethere.TheyhavemultipleCTVassetsacrosshardware,

distribution,andcontent.Andveryinterestinglyinthelastfewyears,they’vestarteddrivingalotof

partnershipswiththemajorsocialplatforms,evenastheyarebecomingmorecompetitivewiththoseWalledGardens–emblematicofhowcriticalCommerceSignalis.

OthersintheindustryarefollowingAmazon’slead.Thelargestcompanieswithaccesstoconsumersare

announcinginitiatives–inventoryanddatapartnerships–toaggregatetheirscaled,uniquedataandbringittobearacrosstheadecosystem.Ratherthanacquirethetechnology,mostaredoingthisviapartnerships,thoughthereareafewexceptions,suchasWalmart’sacquisitionofViziotoattainO&OcapabilitiesinCTV.

CTVismovingtowardOutcomes.Justconsiderwhat’shappenedoverthepastfewyearsasframedbyan

Economicssupplyanddemandchart.

WithviewersshiftingtowardSVOD,therewasinitiallyashortageofpremiumadinventorycomparedtolinear

TV.

Fast-forwardto2022-23whenthepreponderanceofSVODvendorsleanedintoad-supportedmodelstodrive

greatermonetizationontopofsubscriptions.ProliferationofFASTasacategoryandtheseAVODtiers,especiallyAmazonPrimeVideo,contributedtoadelugeofinventory.

Wherewesittoday,CTVisnolongerasupply-constrainedchannel.WithcontinuedshiftofeyeballstoCTV

(fromLinear)andtheriseofplatformslikeYouTubeandPrimeVideo,moreandmorestreamingplatformsareleaningintoperformanceasanopportunitydriverevenuesbyreachinganewcategoryofadvertiser.

Wherepeoplespendtheirtimeshowsasignificant?andgrowing?concentrationwithinbothWalledand

HedgedGardens.

Historically,Social,StreamingDistribution,andSubscriptionCTVwereconsumedandperceived(bythead

ecosystem)asseparate,siloedecosystems.

Thatischanging.Theseplatformsarealigningandincreasinglyfocusingonvideoentertainment,allsupported

byadvertising.Contentfromtheseplatformsspansshort-formandlong-form,thoughtheyareincreasinglyintertwinedanddirectlycomparable,withsomecompanies,likeYouTubeandSpotify,operatingacrosstheentirespectrum.

Thepopularityofshort-formvideohasskyrocketeddrivingplatformssuchasYouTube,Meta,andTikTokthat

didnothaveclearcompetitorstobegincompetingdirectly.We’vealsoseenanincreasingconvergence

aroundlongform,videopodcastingatthesametimethemediumbecomesincreasinglycredibleinthemedialandscape.Infact,therecentelectionhasbeendubbedthe“podcastelection”duetothesignificantinfluenceofthiscontent.Thesetooarebleedingintoshort-form,withpodcastclipsemergingasgrowthformatinshort-formvideos.Overall,there’saclearconvergencehappeningaroundthisnewformofmedia.

Partofthistrendhasbeendrivenbytheplatformsthemselves,astheyincreasinglyfocusonincreasing

consumertimespentandgearingthemtowardsentertainmentover“social”.IfyouconsiderInstagram’s

currentusecase,it’snolongerprimarilya“socialplatform”whereyouconnectwithanetworkoffriends.IthasshiftedtofocusheavilyonanInterestGraph,whichhasmoretodowithwhatyou’rewatchingthanwhoyou

areconnectedtoo.

Infact,in2024just7%ofpeople'stimeonInstagramwasspentviewingtheir“Friends”content.

User-generatedcontenthasalsomadeitswayintotheLivingRoom,withYouTubeleadinginshareofTV

viewershipaccordingtoNielsenGaugedata.

Infact,TVisnowtheprimarydeviceforconsumptionofYouTubecontent.

WetalkedyearsagoabouthowthedefinitionofTVwouldberecategorized.Therecategorizationwas

historicallydrivenbysupplyconstraintsandtheinclusionofotherPremiumVideodeliveryplatforms,buttodayisdrivenbyaconvergenceoftheseplatforms.WhenYouTubeisthemostwatchedappinthelivingroomandconsumersspendhourswatchingclipsontheirphones,itshiftstheconsiderationdynamicsbetween“UGC”

and“primetime”andforcesare-definitionofwhatshouldbeconsidered“premium”videoentertainment.

Unsurprisingly,thetime,intent,andattentiondevotedtothesechannelshavedrivenmassiveadspend.

Today,SocialPlatformsandCTVDistributionchannelscollectivelyaccountforover$300billioninadvertisingspend.

Asalltheseplatformsevolveintoformsofvideoentertainment,Creatorsbecomemorecentraltocontent

consumption.We’reseeingaconvergenceinformat,butatthesametime,afragmentationaround