AI's Effect on Digital Advertising Unveiled in New IAB Europe Publication
AI Transforming Digital Advertising Across Europe, According to IAB Europe Report
AI is making a significant impact on the digital advertising industry in Europe, according to a new report released by IAB Europe. The report, titled "The Impact of AI on Digital Advertising," was developed by IAB Europe's AI Working Group and gathered nearly 100 responses from various sectors in multiple European markets, with over half of the responses being in German.
The report reveals that 85% of companies are already using AI-based tools for marketing, with no respondents planning to reduce spend, and the majority expecting to maintain or increase investment. Targeting and content generation are the leading AI-powered functions in digital advertising, streamlining processes, enhancing scale, and driving performance.
However, gaps remain in governance, expertise, and demand for guidance in AI adoption. Only a third of companies receive buy-side guidelines on AI, and governance is either not formalised or rests with a single lead in many organisations. To address these challenges, IAB Europe's AI Working Group will prioritise developing a Guide to Prompting for Digital Advertising and collaborating with publishers to address content access.
Privacy is the number one concern in AI-powered digital advertising. While 68% of companies have general internal AI guidelines, less than half have them for marketing and advertising. The report emphasises the need for clear frameworks, ongoing training, and responsible AI deployment.
Wayne Tassie, group director NL at DoubleVerify and chair of IAB Europe's advertising & media committee, commented on the report, stating that AI is reshaping digital advertising. Dimitris Beis, IAB Europe's data analyst & sustainability lead, added that the digital advertising ecosystem is adopting AI for innovative technologies and new user contact surfaces, but challenges such as expertise shortages need to be addressed.
The report highlights that the digital advertising ecosystem has been underpinned by machine learning for decades, and new AI capabilities have transformative potential. Ad tech firms and agencies report clear Key Performance Indicator (KPI) benefits from AI-powered functions, while publishers are more cautious, with fewer than a third citing CPM increases.
The key organisations collaborating with IAB Europe for responsible and effective AI adoption are OneTrust, which integrates with the IAB Diligence Platform for privacy and compliance; national IAB chapters such as IAB Austria, which engage with European policy and industry stakeholders; and the IAB Tech Lab, which develops technical standards and privacy protocols supporting AI governance across the digital advertising ecosystem.
The full report can be downloaded from IAB Europe's website. IAB Europe, a leading European-level industry association for the digital advertising industry, released the first Pan-European Impact Report on the Impact of AI on Digital Advertising on September 18, 2025.
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