The Past, Present, and Future of Digital Advertising

Gen AI based digital ads will make the internet almost unrecognizable in the next 9 months. 🌈

Image credit: The Information adapted by others. Virtual influencers have arrived, new approaches are arriving fast.

The future of advertising is going to change significantly in 2026. I’m not even sure the internet is ready for it.

Fully automated AI ads are on the roadmap for 2026 and we are already seeing signs of this by what the likes of ByteDance and Meta are testing. ByteDance’s virtual influencers are already here. Google of course is also bringing Ads to its AI Mode.

Ads may appear “where relevant” below and “integrated into” AI Mode responses Google has said. I asked

Eric Flaningam

for a compilation on his thoughts about the intersection of Generative AI and the field of advertising.

As text-to-video improves, emotive promoting in audio refines itself, small businesses and brands will have more options for automated Ads that could cut down the need for Ad managers and salespeople in advertising drastically. I believe that 2026 is the big year for this, literally just months away. Generative AI will change how Ads are made, where they are seen and how personalized they are to us and even their delivery timing in social commerce journeys.

Ads being Google’s primary cash cow — the company notched $66.89 billion in ad revenue in Q1 2025 alone and digital ads also make up 98% of Meta’s revenue. In 2024, ByteDance's total revenue was $155 billion, with approximately 60% derived from advertising. All three are in a frantic race to build the best platforms with Generative AI to make ads cheaper to run and even more cost-effective for campaigns. Meta Platforms is actively testing and rolling out new auto-generated video ad tools powered by artificial intelligence.

The way we experience social media and Ads in apps is also shifting where Ads will appear even on WhatsApp. At first, Meta’s Ads in Whatsapp will show within WhatsApp’s “Updates” tab to separate the promotions from people’s personal conversations. Meanwhile OpenAI have hinted at how they will incorporate Ads too.

Jia Lim, previously at Character AI recently demonstrated how she sees the industry evolving in a provactive video:

The Future of Ads will finally feel different [link to TikTok]

Eric Flaningam

of Generative Value Newsletter is easily one of my favorite writers on various companies and Generative AI trends.

Read Generative Value

Eric’s easy to read tutorials and profiles of companies are educational to say the least:

His broad range of topic choices related to macro overviews of both AI Infrastructure and company deep dives really appeals to me.

• The Current State of AI Markets

• TSMC: The Index on Technology

• Salesforce & AI Strategy

• Databricks and the Future of Data

• The Future of Foundation Model Business Models

Let’s get into the deep dive by Eric, which is a compilation of at least three of his original pieces already published.

• Expect clear writing

• Incredible infographics

• Synthesis of data for macro overview that’s easy to understand

Few industries have so much potential to be totally transformed as does Advertising by new Generative AI tools and approaches in 2026. But first let’s get some historical context.