Online advertising adapts: Chat the centre of transformation
The pursuit of AI-native advertising formats has landed on chat as the most feasible route to add value, although the effect is to amplify existing strengths and weaknesses.
Practical constraints are slowing the agentic transformation beyond automation. Efficiencies are still the primary value-add, with agencies and adtechs looking to offset a greater infrastructure cost burden.
The end-to-end platform model continues to win: the arena for competition is now shifting towards commerce and control of user access points as scale and data advantages persist.
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AI was the story of Cannes, both growing the market with new formats and cannibalising it. Not all AI increases to production are monetisable, creating disruption though the fundamentals of building engagement and resonance are unchanged.
Major platforms are still the main winners as supply ownership becomes key for differentiation. Agencies, adtechs, and commerce media are converging in function but diverging in approach as AI blurs the value chain.
Creative is at the centre of tensions between AI-led mass-market automation and human-centred bespoke connection. Platforms are defending SME audiences with end-to-end integration as agentic AI poses both opportunity and threat.
Big tech platforms are extending their advertising lead by deploying existing AI strengths to expand functionality and offer advertisers streamlined performance.
A cohesive model for chatbot advertising is still elusive. While in the process of defining its positioning, it currently impacts discovery more than search.
Scale no longer guarantees agency advantage: value capture is shifting away from providing services and towards owning the processes, tools, IP, and media.
Online advertising in 2026: Amazon forces displacement
2 February 2026Recently awakened sleeping giant Amazon is using its vast resources to ramp up an aggressive open web stance, offering advertisers low take rates through its DSP.
Adtech firms risk destroying their own margins in response, so are increasingly extending their positions across the value chain as they compete to offer ‘end-to-end’ services.
2026 will be make or break for the agency holding company model as Omnicom resets and WPP’s need to see the benefits of its turnaround becomes urgent.
Display advertising is forecast to grow c.7% in 2026 despite lacklustre consumer confidence, out of sync with the gradual economic recovery.
Online advertising has doubled its share of online consumer spend since 2015. Major ad platforms account for over 40% of all UK display advertising spend.
Mature media’s prospects more closely align with the UK economy, with real term growth unlikely this year.