However, sources predict this moderate growth is most likely to be concentrated in a few hands, with the titans of Silicon Valley on course to benefit most from this trend.

Per Madison & Wall’s revised assessment, programmatic spend follows stronger-than-expected performance in 2025 and reflects a moderation in growth rather than a downturn. 

For programmatic advertising, the forecast points to continued expansion in automated buying, concentrated in digital formats that deliver measurable performance, while much of the open internet — that includes independent ad tech — is under intense pressure to compete with the likes of Amazon and Google.

The upgrade comes after another strong quarter. Advertising revenues grew 13% year over year in Q3 2025, excluding political spending, the fastest quarterly pace since early 2022 (see chart). 

Digital advertising increased 21%, raising digital’s share of total ad spend to 72%, with the forecast underscoring the continued dominance of channels with first-party data, closed-loop measurement, and AI-driven optimization.

Looking ahead, Madison & Wall expects economic conditions to remain broadly supportive in 2026, despite rising policy and geopolitical risks. Consensus forecasts point to real GDP growth of roughly 1.8% and inflation near 2.8%, implying nominal GDP growth of about 4 to 5%. While the correlation between economic growth and advertising has weakened, the firm views nominal growth as a meaningful reference point for advertising demand. It expects advertising growth to slow gradually rather than correct sharply.

Within that environment, programmatic advertising is expected to increase its share of open internet transactions. Madison & Wall forecasts programmatic revenues across the open internet to grow 4.4% in 2026, with programmatic accounting for 74% of open internet ad revenues. Growth is expected to be driven by programmatic connected TV, digital out-of-home, and digital audio, each projected to grow at double-digit rates as automation expands across newer digital formats.

However, total open internet advertising revenues are expected to be roughly flat. Programmatic growth in 2026 is therefore driven primarily by a shift in buying methods rather than an expansion of overall spend. Programmatic revenues tied to digital platforms and publishers are expected to decline slightly, reflecting ongoing pricing pressure and uneven demand outside large-scale platforms.

In his end-of-year assessment, W Media Research‘s Karsten Weide remarked how much of the ad tech ecosystem on the open internet was in open conflict, highlighting how the Q3 dispute of transaction IDs, or “TIDs,” between buy- and sell-side players is an open wound. “What once sounded like a technical dispute over wrappers and auction mechanics has escalated into a power struggle over who governs the open internet,” he noted.

By contrast, closed digital platforms are expected to continue to capture a disproportionate share of incremental spending. Madison & Wall forecasts commerce media to grow 16% in 2026, social media 15%, and search 8%. The firm expects ad tech platforms to introduce additional AI-powered buying tools designed to replicate the automated, outcome-focused buying models already prevalent within walled gardens.

Madison & Wall further noted how advertisers are placing greater emphasis on price and performance, often at the expense of transparency and control, with spend increasingly directed toward platforms that bundle creative, optimization, and measurement within the cost of inventory.

Direct relationships between advertisers and large media owners continue to expand; this is a trend that reduces reliance on agency-managed buying systems, with Madison & Wall expecting AI to enhance this trend as more workflow tools are made available in the industry.

Meanwhile, search and commerce advertising are expected to remain structurally resilient, while publishers across the open internet face greater pressure to adapt their business models. In that context, programmatic advertising continues to function as a core transaction layer — growing in importance, but operating within a more constrained overall market.

What we’ve heard

“If I have the opportunity to leave, I’m leaving. Omnicom is NOT competitive in my eyes. Their benefits suck and they are moving away from creative driven [sic] work and focusing on data driven [sic] work and pumping out as much content as possible.”

— An Omnicom staff member speaks truth to power on the gift that keeps on giving, i.e., the OmnicomIPGmerger subreddit, while others use other threads to estimate that the layoffs are not even halfway done.

Numbers to know

From the 2026 Integral Ad Science Industry Pulse Report:

• 88%: of media experts cite digital video as a top priority for advertising and media planning in 2026, ahead of display and audio.  
• 84%: of respondents say social media is a top priority among digital environments for investment and strategy next year.  
• 61%: of media experts are excited about the opportunities generative AI brings to digital media and advertising.  
• 83%: of survey participants express concern about the rise of AI-generated content on social media and the need for careful monitoring.  

What we’ve covered

WPP estimates commerce media spending to overtake TV this year

The company’s latest global ad spend forecasts predict that commerce media will account for 15.6% of global ad spend in 2025, compared with the 14.6% spent on linear and connected TV. 

The case against AI agents for programmatic ad buying

Christopher Francia, director of product development and client performance at Attention Arc explains discusses whether or not AI agents be involved in programmatic ad buys. Plot spoiler: “We’re not trusting that to large language model-based agents.”

What we’re reading

Google tells advertisers it’ll bring ads to Gemini in 2026 

Google has said to advertising clients in recent days that it plans to bring ads to its AI chatbot Gemini, according to agency buyers familiar with the conversations, according to Adweek’s Trishla Ostwal.  

AI brings MFA to social media… how advertisers can avoid it

Zefr CEO Rich Raddon argues that generative AI has led to the re-emergence of an unwelcome visitor from the past for most advertisers.

X shuts down EU’s ad account after first major DSA fine

The European Commission issued a €120 million fine to X — its first fine issued under the Digital Services Act (DSA) following prior allegations. Following the fine and a public response from X CEO Elon Musk, X shut down the Commission’s ad account.

Advertiser battles Google, alleges failure to disclose queries

“Google prioritizes profit over integrity by using its Google Ads program to deceive its customers, primarily small businesses, out of their hard-earned money,” the advertiser argues in papers filed Thursday with U.S. District Court Judge Case Pitts in San Jose. “Since 2020, Google has accomplished this grift, by hiding a significant portion of its client charges inside an impenetrable ‘black box’ that not even Houdini could open.”