Two key areas of focus: AI Search and Targeting. 

The digital advertising landscape is evolving, and two forces are contributing to rewriting the strategy playbook: the impact of AI on search and data privacy that’s impacting targeting. 

Search Has Changed
For two decades, search advertising was a simple proposition — bid on keywords, win placement, earn clicks. That model is changing. Google’s AI Overviews now appear in nearly half of all searches, generating synthesized answers that sit above traditional results and intercept user attention before ads even enter the picture. On AI Mode — Google’s conversational search experience powered by Gemini — zero-click rates reach 93%. Users get their answer and move on, never touching a result.

The commercial implications are real. Studies tracking over 25 million paid impressions found that when AI Overviews appear, paid click-through rates drop by as much as 68% compared to traditional Search. Position one no longer means what it used to.

But the story isn’t simply one of decline. It’s one of displacement and opportunity. Ads are now appearing inside AI-generated answers, not just around them. Google began embedding Search and Shopping ads directly within AI Overviews in 2025 and expanded the placement globally through 2026. Brands cited within AI responses earn 91% more paid clicks than those that aren’t. The new premium real estate isn’t the top of the page — it’s inside the answer itself.

Identity Is Crumbling — and Being Rebuilt

The second major shift is quieter but equally consequential. The infrastructure that powered a decade of digital targeting is no longer reliable at scale. Privacy legislation now covers 19 US states, with more coming. Cross-site tracking has fragmented. As a result, the addressable audience has shrunk considerably. 

What’s replacing it isn’t a single solution but a portfolio of approaches. First-party data, contextual advertising, and retail media networks have grown to nearly $70 billion in the US alone for this reason.

The Underlying Shift

Taken together, these changes point are important and impactful. The brands winning in 2026 aren’t the ones with the biggest keyword lists or the most aggressive retargeting stacks. They’re the ones whose content earns citation in AI answers, whose first-party data is clean and actionable, and whose creative is relevant enough to earn attention in an environment where attention is harder than ever to hold.

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Terms: 

First-party data
is information a brand collects directly from its own customers, like purchase history, email signups, loyalty activity, with no middleman involved. It’s become the foundation of modern targeting because it’s accurate, consent-based, and privacy-safe.

Contextual advertising is placing ads based on the content surrounding them rather than the identity of the viewer — a running shoe ad next to a marathon training article, for example. AI has made this far more sophisticated, matching ads to the tone and sentiment of content, not just the topic.

Retail media networks are advertising platforms built by retailers like Amazon, Walmart, and Target that let brands advertise within their ecosystem. Their key advantage is closed-loop measurement — because the retailer controls both the ad and the checkout, they can tie impressions directly to purchases with certainty.

Addressable audience is the pool of users an advertiser can actually identify and target with personalized ads. As privacy laws tighten and tracking signals disappear, this pool has shrunk significantly — meaning fewer users can be reached with precision targeting at any given time.

Cross-site tracking is the practice of following a user’s behavior across multiple websites to build a profile of their interests and intent. It traditionally relied on third-party cookies, which are now heavily restricted or blocked — making it increasingly difficult to retarget users or measure campaign attribution across the open web.

SOURCES:

Think with Google
https://business.google.com/us/think/ai-excellence/how-brands-use-ai-max-search-campaigns/

Google Blog:
More opportunities for your business on Google Search (May 2025): https://blog.google/products/ads-commerce/google-search-ai-brand-discovery/

AdAge:
https://adage.com/trends-predictions/business-forecast/aa-ad-and-marketing-leaders-2026-predictions/