IAB Compass: Navigating AI
How to get the most of IAB Compass
This chapter of IAB Compass - focused on the rise of artificial intelligence - is the latest addition to a body of research that so far spans digital out-of-home, connected TV, gaming and shoppable advertising. Our aim is to guide advertisers, agencies, and media professionals through the evolving landscape of digital advertising by focusing on fast-evolving areas - offering market forecasts, growth trends, and actionable insights to help industry stakeholders effectively engage with these emerging platforms. In addition to this chapter on AI, we will also be bolstering IAB Compass’ resources with new additions focused on creators and retail media later in 2025.
AI in numbers
30%
of Gen Z would engage with an AI influencer
92%
of baby boomers want AI’s use in advertising to be clearly labelled
£3.34bn
of UK ad spend forecast on AI platforms by 2030 in average growth scenario
AI advertising forecast
AI is no longer emerging – it’s accelerating. The UK’s AI sector reached a combined market valuation of $230bn in Q1 2025, which is more than the size of Germany and France’s AI markets combined, making it the largest AI market in Europe.
When it comes to advertising, Generative AI is reshaping the landscape – from content creation to the future of search and ecommerce. For example, by 2030, it is projected that approximately 33% of total search advertising spend will be redirected towards AI-powered search interfaces, or "answer engines", reflecting a structural change in how consumers access information and how businesses capture demand.
As the AI market develops, AI platforms are likely to become drivers of ad revenue themselves. We forecast that UK ad revenue generated by AI platforms will stand at £3.34 bn in an average growth scenario, rising to £6.06bn if there is faster than anticipated monetisation and update of ad formats among key players, alongside increased consumer usage.
The AI opportunity & what to do next
AI tools are opening new doors for digital advertising – from improving campaign efficiency to personalising creative at scale. But adoption requires more than just access to the tech.
Trust, transparency and clarity around usage are critical. Consumers are calling for responsible AI – 73% worry about misinformation and 92% of baby boomers want brands to clearly disclose when ad content is AI-generated.
As AI becomes more embedded in media planning, creative production and targeting, advertisers must stay alert to changes in regulation, adapt to new search behaviours and embrace emerging monetisation models across subscription and freemium AI tools.
Recommendations for the ad industry
IAB Compass highlights key actions for advertisers, agencies, platforms and tech partners, including:
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The need to prioritise data accuracy, transparency and ethical use of AI-generated content
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Educating audiences about AI’s role in marketing to directly address concerns about misinformation, cybersecurity and data misuse
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Opportunities to embrace Gen AI in creative workflows while maintaining human oversight
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Embedding governance frameworks and aligning with emerging regulation
To explore all recommendations in full, download the latest chapter of IAB Compass.
Explore IAB Compass’ AI findings in full
- Executive summary
- What is AI?
- The current UK AI market size
- What’s to come?
- Recommendations
