Smartly’s 2026 Digital Trends Report shows 92% of marketers agree AI transforms customer engagement while precision-first marketers waste 27% less budget.

Artificial intelligence has moved from experimental technology to essential marketing infrastructure, with 92% of surveyed marketers reporting that AI is fundamentally redefining how they connect with consumers, according to research released November 5, 2025, by advertising technology platform Smartly.

The company’s seventh annual Digital Trends Report, based on survey responses from 450 marketers across the United States, United Kingdom, and Germany, reveals that 2026 will mark a transition toward predictive marketing systems where AI transforms traditional funnel concepts into fluid, intelligence-driven consumer journeys. The research was conducted by Reach3 Insights during August 2025, examining organizations spending at least $5 million annually in paid media.

The study identifies three primary forces reshaping digital advertising: AI-powered decisioning replacing reactive optimization, convergence of social video and connected television platforms, and emergence of what Smartly calls “precision-first marketers” who deploy AI across six or more advertising platforms simultaneously.

Cross-channel expansion becomes competitive requirement

Marketers embedding AI deeply into campaign workflows now advertise across twice as many platforms compared to peers, the data shows. These precision-first marketers operate campaigns on six or more platforms, compared to three to four platforms used by average marketers surveyed. The approach extends beyond platform quantity to workflow integration, with precision-first practitioners demonstrating 22% higher likelihood of applying AI to campaign planning and creative development processes.

All surveyed marketers expressed desire for greater platform reach than current deployments achieve. Fifty percent believe diverse challenger platforms including connected television and Reddit deliver significant value for reaching incremental audiences. These precision-first marketers allocate 20% more likely to test new platforms with larger budget commitments and demonstrate 20% greater likelihood of using AI for ongoing campaign optimization.

The research examined platform usage rates among marketers who strongly believe in incrementality value. TikTok usage reached 65% among this group compared to 50% among others surveyed. Meta platforms showed 82% adoption versus 77% among peers. YouTube reached 71% compared to 59%, while LinkedIn stood at 33% versus 25%. Snapchat usage measured 34% against 26%, and Spotify audio streaming reached 26% compared to 18% for those less focused on cross-platform incrementality.

Video format becomes connective tissue across channels

Video has transitioned from competitive advantage to baseline expectation, with nearly all Smartly platform customers running video advertisements during 2025, according to company operational data cited in the report. Investment priorities reflect this shift: 50% or more of surveyed marketers plan spending increases on Meta platforms, YouTube, and TikTok for 2026. LinkedIn video advertising investment will increase according to 46% of respondents, while 44% plan higher spending on Spotify and connected television. Twitter/X shows 43% planning increases, Pinterest 41%, Snapchat 36%, and Reddit 34%.

Platform categorization by market reveals distinct regional priorities. In the United Kingdom, 65% of marketers plan connected television spending increases, compared to 41% in the United States and 53% in Germany. YouTube shows 70% planning increases in the UK versus 60% in the US and 56% in Germany. Meta platforms lead US marketer plans at 77%, compared to 63% in Germany and 65% in the UK.

The study found 95% of marketers currently use AI for creative generation or optimization, including video asset production. Video no longer confines itself to traditional video platforms, instead serving as connective infrastructure across social media, connected television, and audio streaming environments. LinkedIn, Reddit, and Spotify have expanded video format options from in-feed storytelling to immersive audio-visual placements, providing advertisers with new approaches to full-funnel performance advertising.

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One-third of surveyed marketers already deploy AI for predictive modeling, creative validation, or AI-driven creative generation. An additional 86% plan to expand these capabilities during 2026, representing substantial acceleration in pre-launch intelligence adoption.

Precision-first marketers achieve 27% greater likelihood of maintaining media waste below 10% of budget compared to average marketers surveyed. These advanced practitioners demonstrate 40% higher probability of using AI to quality-assure campaign setup before launch and show 35% greater likelihood of using AI for creative development processes.

The research categorizes media waste levels among respondents. Between 1-10% waste: 29% of marketers reported this range. Between 11-20%: 35% fell into this category. Between 21-30%: 21% estimated waste at this level. Between 31-40%: 8% reported this range. Between 41-50%: 2% indicated waste at this level. Above 50%: 4% estimated waste exceeding half their budgets.

Advanced marketing teams have shifted from reacting to campaign results toward predicting outcomes before launch. Predictive AI now powers creative scoring systems, budget allocation algorithms, and campaign validation protocols executed before spending begins, transforming efficiency metrics into foresight capabilities.

Marketing teams with lowest media waste demonstrate stronger performance across all funnel stages. These teams launch campaigns faster, personalize content more effectively, and measure impact with greater confidence than peers. The distinguishing factor centers on foresight rather than luck, as teams use AI-powered optimization and pre-launch intelligence systems to anticipate results before budget expenditure occurs.

Personalization shifts earlier in consumer journey

AI has transformed marketing approaches from one-to-many broadcast models to one-to-one personalization from campaign inception, providing brands unprecedented personalization capabilities. The research identified three primary transformation areas: personalization starting sooner, consistency becoming new currency, and prediction replacing reaction.

Among AI applications, 46% of marketers use the technology for personalization across channels, while 42% scale creative production with AI to reach different audience segments. Another 42% deploy AI for real-time audience segment messaging tailoring. Pre-launch predictive models see 30% adoption, while 29% validate message fit before launch. Integrated AI workflows across creative, media, and measurement functions reach 33% adoption.

The customer journey has evolved from linear progression through awareness, consideration, and conversion stages to fluid movement where consumers bounce between phases or jump directly from awareness to purchase. Traditional funnel concepts no longer accurately model consumer behavior patterns as AI enables real-time optimization and early-stage personalization.

Marketers must deliver consistent brand messages across increasingly fragmented touchpoints. AI enables stronger brand continuity and coherent storytelling across every screen, ensuring appropriate messaging in proper contexts. This consistency proves imperative as consumers engage with brands across multiple simultaneous platforms.

Operational challenges persist despite technology advances

Creative and operational bottlenecks continue limiting performance despite proliferation of new marketing tools. Marketers cite personalization difficulty, production speed constraints, and creative consistency as primary barriers to achieving objectives.

Difficulty personalizing creative for target audiences ranked highest at 38% of respondents identifying this challenge. Time-consuming creative production affected 37%, while inconsistent creative quality across platforms reached 35%. Advertisements not optimized for platform specifications troubled 34%, and limited automation tools to support campaign delivery impacted 33%. Compliance issues related to legal or regulatory standards concerned 30%, matching communication breakdowns between creative, media, and analytics teams. Overspending or budget inefficiencies as campaigns scale affected 29%, while managing higher volumes of campaign assets and versions challenged 28%. Limited real-time visibility into campaign performance troubled 24% of marketers surveyed.

Complexity compounds as brands expand across channels and formats. Scaling high-quality creative without sacrificing speed remains the central operational obstacle facing marketing organizations. Personalization, production, quality assurance, and tooling represent the top operational bottlenecks marketers experience according to the study.

Teams capable of converting data into consistent, high-quality creative at scale position themselves to advance and lead within the industry. This capability requires fundamental workflow transformation rather than incremental tool adoption.

AI adoption surges past initial skepticism phase

AI has officially moved beyond skepticism into everyday practice, fueling creative, media, and measurement workflows throughout marketing organizations. Last year, 80% of marketers believed AI was living up to initial hype surrounding the technology. Now in 2025, that figure has increased to 88%, representing nearly 10% growth in just one year.

The study asked marketers about current AI adoption status. Fifty-six percent have already invested in generative AI for visual asset creation, up from 47% in 2024. Another 40% are conducting initial testing, compared to 34% previously. Only 3% report interest without having started, matching prior year levels. Just 1% report no interest, down from 3% in 2024.

For optimization purposes, 54% have invested in AI, compared to 51% in 2024. An additional 38% are conducting initial testing, similar to 32% previously. Eight percent express interest without having started, while less than 1% report no interest in optimization applications.

Regional variations appear in optimization adoption. Among respondents globally, 55% have already invested, while 36% conduct initial testing. In the United Kingdom, 58% have invested compared to 38% testing. Germany shows 54% invested and 37% testing, while the United States reports 51% invested and 39% conducting initial tests.

Predictive capabilities emerge as pre-launch competitive advantage

Pre-launch intelligence enables marketers to transition from reacting to results toward anticipating success before spending occurs. Functions previously residing in post-launch analytics now occur during pre-campaign phases.

Three primary developments enable this shift. Predictive modeling powered by AI helps marketers plan smarter budget allocation strategies before campaign activation. Creative scoring identifies strong concepts before spending occurs, reducing reliance on post-launch optimization to discover effective approaches. Integrated AI workflows unite creative and media teams within single ecosystem environments, eliminating traditional handoff delays and communication gaps.

Current adoption rates for pre-launch AI applications show 28% use AI to quality-assure campaign setups before launch, with 32% expressing desire to implement this capability. Twenty-four percent run campaigns through AI pre-testing engines before full deployment, with 28% planning to adopt this approach. Thirty percent use AI predictive models to forecast campaign performance, while 35% plan to implement forecasting systems.

These preemptive steps allow marketers to reduce campaign errors and creative revisions, generating measurable time savings before launch occurs. Precision-first marketers consistently engage in more pre-campaign activities than peers, demonstrating that early-stage AI integration correlates with superior performance outcomes.

Market implications and strategic priorities

The research underscores fundamental transformation occurring across digital advertising. Marketers in 2026 will not merely respond faster to market conditions but plan smarter by leveraging AI to anticipate performance before spending. These teams transform complexity into clarity, adapting AI for seamless cross-channel approaches.

“AI is fundamentally rewiring marketing, from creative ideation to performance optimization, and redefining how brands connect with consumers across social, video, and CTV,” said Brianna Gays, SVP of Marketing and Communications at Smartly, in the November 5 announcement. “We’re seeing a new class of precision-first marketers emerge, those who let intelligence guide where, how, and how fast they scale. They’re not just keeping pace with change, they’re shaping it.”

The findings carry significant implications for marketing community planning cycles. Organizations unable to effectively integrate AI across media processes risk falling behind more agile competitors as half of surveyed companies expect full-scale adoption by 2026. The window for maintaining competitive parity closes rapidly as technology adoption accelerates industry-wide.

Technology alone will not drive success according to the research. Full-scale deployment requires fundamentally rethinking how agencies, brands, and publishers execute media campaigns. This transformation includes establishing clear roadmaps, ensuring data quality standards, implementing comprehensive training programs, and addressing fragmentation across disparate tool ecosystems.

The 2026 Digital Trends Report is available for download at Smartly’s website. The study represents Smartly’s seventh consecutive annual examination of shifting realities in modern advertising, conducted in partnership with Reach3 Insights during August 2025.

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Timeline

• March-April 2025: Reach3 Insights conducts preliminary survey work examining cross-channel video advertising approaches and creative adaptation challenges
• July 9, 2025: Smartly and EMARKETER publish research showing 72% of marketers reuse creative assets across platforms, highlighting creative execution gaps
• July 15, 2025: Interactive Advertising Bureau research indicates 86% of buyers using or planning generative AI for video creation by 2026
• August 2025: Smartly commissions Reach3 Insights to conduct Digital Trends Report survey of 450 marketers across US, UK, and Germany
• September 3, 2025: Smartly announces Spotify Ads Manager integration enabling audio, display, and video campaign management through unified platform
• October 1, 2025: Smartly appoints Maxwell Tang as Chief Product Officer, Melissa Yang as SVP of Ecosystems & AI Applications, and Julie Green as SVP of Global Customer Success
• October 15, 2025: Digital 2026 report reveals 5.66 billion social media users representing 68.7% of global population
• October 28, 2025: Adobe announces GenStudio expansions including custom AI models and advertising platform integrations with major channels
• November 4, 2025: Newton Research launches agentic AI analytics integration with Snowflake Cortex AI for marketing measurement
• November 5, 2025: Smartly releases seventh annual Digital Trends Report showing 92% of marketers say AI transforms customer engagement

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Summary

Who: Smartly, an AI-powered advertising technology platform, released research commissioned through Reach3 Insights examining 450 marketers and marketing budget decision makers across the United States, United Kingdom, and Germany at organizations spending at least $5 million annually in paid media. Industries represented include agency, automotive, consumer packaged goods, electronics, entertainment, gaming, media, financial services, fintech, food and beverage, insurance, retail, telecommunications, technology, and travel sectors.

What: The 2026 Digital Trends Report reveals that 92% of marketers agree AI is transforming how they engage consumers, with precision-first marketers advertising on twice as many platforms as peers and demonstrating 27% greater likelihood of keeping media waste below 10% of budgets. The research identifies emergence of predictive marketing systems where AI enables personalization from campaign inception, with 95% of marketers using AI for creative generation or optimization and 86% planning to expand predictive and creative intelligence capabilities in 2026.

When: Reach3 Insights conducted the survey during August 2025, with Smartly announcing findings on November 5, 2025. The report examines current marketing practices and projects trends for 2026, representing Smartly’s seventh consecutive annual analysis of digital advertising shifts.

Where: The research focuses on digital advertising strategies across social media platforms, connected television channels, video streaming services, and audio platforms. Survey respondents represent marketing organizations operating globally with particular concentration in United States, United Kingdom, and German markets. The study examined advertising approaches across platforms including Meta properties, Google platforms, TikTok, LinkedIn, Snapchat, Pinterest, Reddit, Spotify, and connected television environments.

Why: The research matters because it demonstrates AI transition from experimental technology to essential marketing infrastructure, with precision-first marketers achieving measurably superior outcomes through cross-channel fluency and predictive intelligence systems. Organizations unable to effectively integrate AI across media processes risk falling behind as half of surveyed companies expect full-scale adoption by 2026. The findings provide marketing professionals with data-driven insights for strategic planning, budget allocation, technology investment, and workflow transformation decisions heading into 2026 planning cycles. For the marketing community, the research quantifies how cross-channel orchestration combined with AI-powered decisioning separates leading organizations from peers, with implications for competitive positioning, operational efficiency, and campaign effectiveness across increasingly complex digital advertising landscapes.