Performance marketing trends for 2025: We ask the experts

Only last month, Ebiquity and the WFA produced a report suggesting a shift in marketing budgets towards performance, driven by retail media and CTV. The consensus seemed to be that marketers are being tasked with producing results in the short term, even if everyone involved is aware of the potential danger of taking their eye off the ball when it comes to longer term brand building.

But what do those working in the industry see on the ground? How is strategy changing within online advertising?

We asked our experts about the state of performance marketing right now, how budgets and ways of working are changing, and what skills are in high demand. As in the aforementioned report, AI and automation features heavily.

Below you can see a list of some of the talking points. Some may appear more mysterious than others, but overall, despite or perhaps because of the emergence of AI, there seems a desire for the industry to provide greater strategic and creative value. The gauntlet is thrown down for 2025.

Big thanks to Emily Honey, performance consultant, House of Performance; Siggi Rakovic, CEO, Hunch; Stefanie Briec, Director, Head of Demand Sales UK & INTL, AudienceXpress; Emma Welland, co-founder, House of Performance; and Wulfric Light-Wilkinson, GM International, Wunderkind.

This year’s talking points:

• Rising cost, declining effectiveness
• The line between social awareness and social conversion is blurring
• AI causes friction
• Incrementality is replacing mass reach
• The oft-overlooked middle funnel
• Consolidation and data are becoming key (don’t spread yourself too thin)
• Agencies under pressure to rethink business models
• Strategy and technology skills in demand
• The ‘master marketer’
• Few shifts have been as decisive as the rise of AI
• Brands are under-utilising first-party data
• Employee generated content in vogue

Happy reading!

Rising cost, declining effectiveness

Wulfric Light-Wilkinson, GM International at Wunderkind:

One of the biggest challenges marketers face today is the rising cost and decreasing effectiveness of online advertising. Third-party channels like paid search and social media increasingly require skyrocketing investments, yet their ability to acquire, engage, convert, and retain customers continues to decline, creating what can feel like an ROI black hole.

Adding to the complexity is the uncertainty surrounding Google’s long-term approach to third-party cookies. To address these challenges, marketing leaders must confront the limitations of cookie-based advertising and transition their focus toward first-party data and owned channel optimisation. By prioritising these strategies, businesses can achieve more sustainable, organic growth while improving customer retention and revenue generation.

The line between social awareness and social conversion is becoming more blurred than ever

Emma Welland, co-founder, House of Performance:

The line between social awareness and social conversion is becoming more blurred than ever. Social media platforms are becoming their own digital ecosystem. This was more apparent than ever over Black Friday, when there was a rise in consumer brands going live and selling their products direct to the consumer.

Brands need to start thinking about social media as it’s own ecosystem, and work out how they build communities, drive value and encourage action without leaving the platform. Brands that shy away from this, will get left behind in 2025.

AI causing friction between agencies and in-house teams

Siggi Rakovic, CEO, Hunch:

There are too many unspoken issues across our industry. But, if I have to choose one, the biggest elephant in the room is the mounting friction between agencies and in-house marketing teams fueled by the rapid adoption of AI. As brands realise that their own teams, armed with advanced AI tools, can deliver results faster and more efficiently than external agencies, the pressure on agencies to justify their fees and value will be higher next year.

Incrementality is replacing mass reach

Stefanie Briec, Director, Head of Demand Sales UK & INTL at AudienceXpress:

Speaking to marketers across Europe, we see their key objectives have remained consistent for the past few years: retaining and winning back customers off the back of economic challenges. One of their main focuses will be customer loyalty in 2025. Marketers may seek better control over their valuable first-party data to strengthen their competitive advantage in an increasingly crowded marketplace.

While performance will always be at the fore, as it underscores what advertising’s basic objective is, there’s a need to hone in on other areas. Incrementality is replacing mass reach, and measurement will continue to be at the centre of the debate for as long as there’s fragmentation in the media.

As such, the industry – from agencies to tech partners – needs to offer better guidance into each channel’s KPIs, facilitate the planning and delivery of cross-platform campaigns, and provide real value around strategy and creativity. As for the latter, I predict a return to creativity as a way to better leverage the innovations our industry keeps offering.

The oft-overlooked middle funnel

Wulfric Light-Wilkinson, Wunderkind:

As an industry, we’ve long over-indexed on top-of-funnel acquisition tactics, heavily reliant on paid media. However, a significant shift is now underway as brands reassess this approach and redirect focus—and budgets—toward the often-overlooked middle funnel. This shift emphasises building long-term customer lifetime value and loyalty through authentic, personalised engagement rather than purely chasing new customer acquisition through paid advertising.

By 2025, this movement is expected to gain further momentum. Brands will increasingly invest in customer loyalty, leveraging first-party data to power hyper-personalised loyalty programmes with tailored, real-time rewards and experiential perks. AI-driven gamification, along with bespoke subscription or membership benefits, will deepen engagement, while post-purchase strategies such as basket-building and referral incentives will drive repeat purchases.

With retention proving more cost-effective than acquisition, the focus will shift to delivering meaningful, customer-centric rewards that foster long-term loyalty and strengthen brand relationships. Investments in post-purchase engagement, exclusive offers, and personalised experiences will ensure brands stay top-of-mind, cultivating sustained customer loyalty in an increasingly competitive market.

Consolidation and data are becoming key (don’t spread yourself too thin)

Emma Welland, House of Performance:

It’s boring, but most marketeers need to insert focus into their marketing strategies. The rise in AI and technology means that consolidation and data are becoming key to paid media platforms working effectively.

Spreading yourself thin, to make sure you are everywhere is a common tactic but also a common downfall. The best marketeers are choosing their strategies wisely and backing themselves on key platforms rather than trying to do everything without the budget.

Agencies under pressure to rethink business models

Siggi Rakovic, Hunch:

For agencies, the pressure to rethink their business models will build up. Traditional pricing structures will need to change as brands want flexible, performance-based approaches that align costs with measurable ROI. Agencies must pivot to demonstrate agility, creative innovation, and value at every stage to stay relevant.

Strategy and technology skills

Emma Welland, House of Performance:

The biggest skills lacking in the performance space are strategy and technology. There are a lot of brands still working in siloes, where there is no overall strategy integrating channels, efforts and reporting. This is an opportunity. The brands that are doing this stand out, for example Monzo, Trip, Luxe Collective.

There is a lot of talk about AI, but there is still a time lag in implementation and development in the performance space. Brands need to be investing time and energy in exploring ways they can use AI to enhance the customer experience and make their customer journeys increasingly personalised and efficient.

The ‘master marketer’

As AI and automation reshape the industry, the skills marketers need are also evolving. Marketers are expected to become “master marketers,” capable of independently managing entire campaign lifecycles—from ideation to analysis.

AI increasingly handles repetitive tasks like content creation, media planning, and performance optimisation, allowing marketers to focus on what truly matters: strategically thinking about creativity and real-time adjustments. AI will potentially become a marketer’s best friend rather than an enemy.

Few shifts have been as rapid and decisive as the rise of AI

Wulfric Light-Wilkinson, Wunderkind:

Of all the transformative shifts in digital marketing over the past few decades, few have been as rapid and decisive as the rise of AI. Its impact is already profound, both in terms of widespread adoption and the immense untapped potential it holds for the future.

Our research shows that 97% of marketing executives are already using AI in their operations, yet many teams are still only scratching the surface of its capabilities. By 2025, we anticipate significant advancements, particularly in the realm of enhanced personalisation. AI algorithms will analyse vast datasets, including customers’ purchasing behaviours and browsing histories, to deliver hyper-personalised product recommendations that drive engagement and conversion.

As brands continue to embed AI across their tech stacks, we’ll see automation not only improving operational efficiency but also transforming customer journey mapping. This will enable a more seamless and intuitive experience, combining the intelligence of AI with the authenticity of human connection to create meaningful and personalised brand interactions.

Brands making the most of first-party data will see results

Emma Welland, House of Performance:

Brands are still underutilising their first party data and missing the opportunity to utilise this to drive efficiency, understand incrementality and aid growth. There is an opportunity within the paid space for brands to utilise their first party data to ensure they are entering relevant auctions with a high propensity of intent, allowing them to focus and drive incremental sales. Brands that are doing this well, will see results in customer acquisition and retention.

EGC (employee generated content)

Emily Honey, performance consultant, House of Performance:

UGC move over. Employee Generated Content (EGC) is going to be the go-to marketing creative in 2025, as it builds on UGC’s authenticity by adding a layer of brand alignment.

As consumers increasingly value authenticity, EGC offers a powerful way to cut through the noise. Within paid advertising, these ads look more native, tell a story and help create meaningful relationships with audiences. In a climate where brand loyalty is at its lowest, EGC could be the answer to building more authentic connections with consumers, fostering trust, and creating a sense of community that keeps customers coming back.