AdRoll is forecasting a busy holiday season for advertisers. The company’s newly released Q3 2025 State of Digital Advertising Report points to a rebound in digital ad demand even as generative AI reshapes consumer shopping behaviors, forcing marketers to balance urgency with fresh strategies.
AdRoll, the AI powered connected advertising platform, has released the Q3 2025 edition of its State of Digital Advertising Report. The results suggest the advertising market is entering the all-important holiday period with renewed momentum, while also confronting the disruptive role that generative AI is beginning to play in how consumers discover products and shop online.
The report highlights that display ad costs, measured by cost per mille (CPM), are recovering after a long series of declines. Display retargeting CPMs, which were 18 percent lower year over year in the second quarter, narrowed their decline to just 3 percent by August. Display prospecting campaigns also saw improvement, with CPMs rising from 31 percent below last year in Q2 to 14 percent below in early Q3. The shift points to advertisers increasing spending as the holiday season approaches.
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Not all campaign types are benefiting from the rebound. Account based marketing (ABM) campaigns continued to weaken. CPMs fell from 11 percent below last year in Q2 to 20 percent lower during Q3. According to AdRoll, part of this downturn reflects the typical summer slowdown in business-to-business advertising, but it is also a sign that companies remain cautious about their budgets as they look ahead to 2026.
AI Disrupts Holiday Shopping Habits
Beyond CPM trends, the report underscores how generative AI is rewriting the rules of product discovery. Tools such as ChatGPT, Gemini, and Perplexity are becoming new gateways to retail websites, with traffic from these engines to U.S. online stores increasing by 4,700 percent year over year in July 2025. AdRoll data also shows that more than half of U.S. consumers have already used or plan to use generative AI engines for holiday shopping this year, whether to spark gift ideas, compare products, or search for deals.
“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.”
The findings suggest that waiting for the traditional holiday shopping peak in late November and December could leave brands behind. With consumer activity accelerating in September and October, marketers who act on awareness campaigns earlier stand a better chance of capturing purchase intent when consumers reach the decision stage.
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B2B Marketers Face Parallel Pressures
For business-to-business advertisers, the calendar brings a different challenge. While B2C brands chase retail traffic ahead of the holidays, B2B marketers are focused on ensuring their solutions remain top of mind as corporate budgets for 2026 are finalized. AdRoll points out that launching ABM campaigns in September and October, when CPMs remain relatively low compared to consumer verticals, creates an opening to influence decision makers before commitments are locked in for the coming year.
Although CPMs in ABM are still declining, the lower costs may offer a silver lining. For B2B brands aiming to maximize exposure ahead of critical budget discussions, the current climate can deliver more efficient reach despite overall cautiousness in spending.
Building Strategies for an AI Era
Taken together, the trends indicate an advertising industry facing both revitalization and reinvention. The rebound in CPMs speaks to healthy demand for digital ads heading into Q4, but the rapid adoption of generative AI for consumer discovery introduces new uncertainties. For advertisers, the dual track challenge is clear. They must respond to short-term spending patterns that favor earlier seasonal investment, while also experimenting with broader brand visibility channels and AI powered campaign optimization.
The report makes it clear that marketers who remain tied to traditional seasonal spending or who rely solely on search and website traffic risk falling behind. Generative AI has begun shifting how consumers interact with information, and that evolution is already affecting campaigns in 2025.
As AdRoll emphasizes, companies that succeed during this new holiday cycle will be those willing to align spending earlier, expand into awareness-driven media like connected television, and adapt to the new mechanics of discovery created by generative AI. For both consumer and business advertisers, the stakes of the coming quarter extend well beyond immediate performance, shaping momentum and positioning as 2026 approaches.
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