Digital Advertising Trends 2025: AI Ad Targeting - Where Privacy and Personalization Coexist

This post is part of G2's 2025 digital trends series. Read more about G2’s perspective on digital transformation trends in an introduction from Tim Sanders, VP, research insights, and additional coverage on trends identified by G2’s analysts.

Customers haven’t changed, targeted advertising has

In G2’s 2024 Buyer Behavior Report, 94% of G2 survey respondents say they currently use AI or AI-powered software. Like many other industries, advertising is adapting to this new world order.

Ongoing privacy concerns may lead to a cookieless future. With third-party data on the chopping block, marketers are scrambling to find an alternative that adheres to privacy standards while maintaining personalization.

Enter behavioral targeting and cookieless advertising. 

Behavioral targeting and cookieless advertising offer another approach to traditional personalization methods by replacing cookie-reliant tracking with behavior-based targeting—which will soon become the standard.

Similar to AI language models like ChatGPT, it operates by predicting the next website a user might visit during their online activity while maintaining anonymity.

This AI-forward approach ensures privacy-friendly behavioral targeting that covers all ad impressions and can support various targeting solutions. This novel evolution to ad targeting is appealing to marketers as it allows for scaling, and privacy aficionados as it offers the protection that today’s users crave.

One tool making this revolution is Dstillery’s ID-free tool. Dstillery’s ID-free cookieless advertising, offers a solution to the most relevant concerns of marketers today: privacy protection, effective targeting, and adherence to compliance regulations. It shows more significant audiences using AI algorithms based on behavioral data and is also adaptable and coherent to compliance regulations.

In a world where time is of the essence and budget is tight, it’s time to make software work for us, not the other way around.

ROI expectations are heightened by over 50%

G2 data shows that AI users expect AI to deliver on value, citing, “57% of buyers expect to see positive ROI within three months of purchase, [which is] putting pressure on sellers to show quick wins and prove value soon after implementation."

 So, what does that mean for products that aren’t entirely reliant on AI models?

The average ROI across the current 418 products combined in G2’s Personalization, Personalization Engines, and Retargeting categories is between 9.9 and 11.2 months. That’s almost an entire calendar year to see the return. While some products might offer the benefit of integrated AI-powered tools, that ROI period combined with potential costs is a luxury that the buyer or user does not have. Not to mention, it is a potential gamble with privacy concerns.

Ethical advertising: compliance and creativity must coexist 

With Google playing the “will they won’t they” game with cookie depreciation and privacy up for grabs, now is the time to find an alternative — ethical advertising. 

For example, Dstillery’s ID-free activation can offer personalized and privacy-driven results that, in some cases, perform 30% better than competitors. In another case study with Tombras, the ID-free approach resulted in a 60% better cost per acquisition  (CPA) and 7.6x more impressions. With safer and more effective digital ad strategies available, this idea of ethical advertising is the way of the future. 

So, ask yourself and discuss with your team: What is the trust of your user worth? Trust is not only the cornerstone of any successful campaign but also a non-negotiable feature of the future.

Check out AI ad targeting’s evolution from earlier this year to set campaigns up for success!

Edited by Supanna Das