Advertisers redirect budgets to mobile apps as AI reshapes search behavior

Web-based publishers face mounting pressure as consumers increasingly turn to AI-powered answer engines instead of traditional search methods. A global study conducted by MediaLink between August and September 2025 reveals that 84% of surveyed marketers and programmatic ecosystem partners have observed shifts in consumer behavior away from conventional search and web browsing.

The research, which included 27 in-depth interviews with senior decision-makers and a survey of 69 clients across North America, EMEA, and APAC, shows that 45% of respondents plan to moderately or significantly shift brand budgets toward mobile in-app advertising within the next 12 months. The study was commissioned by LoopMe and presented findings that span holding company agencies, mid-market agencies, advertisers, publishers, demand-side platforms, and supply-side platforms.

"We're seeing a fundamental transformation in how consumers discover and consume information," stated Mark Wagman, Managing Director and Partner at MediaLink in the announcement. Web-based publishers across multiple verticals—including Health, Education, and Lifestyle—experience sustained declines in organic search traffic as consumers turn to AI tools for information, according to the research findings.

Mobile app engagement continues to grow while web traffic declines. Consumers now spend an average of four hours per day with smartphones, with most of that time devoted to app engagement, according to MediaLink's analysis. This shift has prompted advertisers to view mobile in-app environments as offering several distinct advantages over traditional web-based advertising.

The study identified specific factors driving advertiser preference for mobile in-app placements. Fifty-four percent of respondents cited consumer time shifting to apps as a primary consideration. Higher engagement levels attracted 45% of survey participants, while 41% highlighted improved targeting and personalization capabilities. The declining effectiveness of web-based ads influenced 30% of respondents.

"LoopMe is unique in that they have a differentiated product in a very competitive space where it has become increasingly difficult to stand out," noted Chris Thornton, SVP, Digital Strategy, Planning and Activation & Integrated Investment at Horizon Media. The company's data and survey-driven approach has no direct competitors, according to Thornton's statement. Brand and mid-funnel campaigns where brand storytelling on the path to purchase serves as the objective benefit particularly from the platform.

The emergence of AI-powered search tools like ChatGPT and similar platforms has fundamentally altered information discovery patterns. Traditional search engines face competition from conversational AI interfaces that provide synthesized answers rather than lists of links. This shift affects how advertisers allocate budgets across channels, as consumer behavior migrates away from web-based browsing toward AI-assisted discovery.

"The advertising industry is at a critical juncture," stated Tariq Hassan, Chief Marketing & CX C-Suite Executive, Advisor & Board Member. As AI-powered search and answer engines fundamentally reshape how consumers discover information, the open web's traditional model comes under unprecedented pressure, according to Hassan. Brands that will thrive in this new era are those recognizing that mobile apps offer a more stable, engaged environment where audiences can still be reached at scale with measurable brand impact on business performance.

The study examined criteria driving advertiser selection of programmatic partners, revealing a decisive shift toward platforms offering proprietary audience intelligence and advanced measurement capabilities. Eighty-five percent of respondents consider proprietary data or audience targeting capabilities to either regularly influence or be very important in partner decisions. Measurement and analytics capabilities serve as critical factors for 77% of survey participants, while 75% prioritize audience insights and intelligence capabilities.

Programmatic advertising investment continues expanding across the industry, with 72% of marketers planning to increase spending in 2025. This growth trajectory aligns with the MediaLink findings, as advertisers seek more resilient platforms amid changing consumer behavior. Mobile app advertising specifically has demonstrated strong performance metrics, with diversified approaches showing significant return on ad spend improvements.

MediaLink sized the global market for brand-focused programmatic advertising spend in mobile app, open web display, and connected television at approximately $18 billion in 2025. The firm projects annual growth of 13-15% through 2029. The United States represents 58% of this market opportunity, with EMEA accounting for 18% of the total.

"Websites are being hit hardest by this transformation, but we see this as a positive sign for apps and the app ecosystem," said Stephen Upstone, CEO & Founder at LoopMe. This creates new opportunities for brands to engage with consumers in more protected and innovative environments, according to Upstone's statement.

The complete research findings were discussed during the "Agentic AI and the Future of Brand Advertising" panel at Advertising Week New York on Thursday, October 9, 2025. The panel addressed how artificial intelligence technologies continue reshaping the advertising landscape and what strategies marketers should employ to adapt to these changes.

AI integration in advertising platforms has accelerated throughout 2025, with major technology companies introducing AI-powered campaign optimization tools. These developments affect both search advertising and display inventory, as platforms incorporate machine learning for targeting and creative optimization. Web-to-app strategies have gained prominence as advertisers seek to convert mobile web visitors into app users.

Market dynamics shift as attention measurement becomes increasingly sophisticated. Advertisers demand more precise metrics that demonstrate actual user engagement rather than simple impression counts. The mobile app environment enables granular tracking of user interactions, providing data that supports the business case for budget reallocation.

For the marketing community, these findings signal a structural shift in digital advertising strategy. Publishers relying primarily on search traffic face revenue challenges as AI tools intercept queries that previously drove site visits. Advertisers must evaluate channel mix to ensure they reach target audiences in environments where consumers actually spend time.

The $18 billion market size for brand-focused programmatic advertising reflects substantial opportunity despite the challenges facing traditional web publishers. Double-digit growth projections through 2029 suggest that overall advertising spending will continue expanding even as allocations shift between channels.

Data and measurement capabilities have become critical differentiators for advertising technology providers. Platforms offering proprietary audience intelligence and advanced analytics tools gain preference over those lacking these features. This preference reflects advertiser demands for accountability and performance transparency amid increasing budget scrutiny.

The research methodology involved both qualitative and quantitative approaches. Twenty-seven in-depth interviews with senior decision-makers provided detailed insights into strategic thinking at holding company agencies, mid-market agencies, advertisers, publishers, demand-side platforms, and supply-side platforms. The survey of 69 clients represented diverse company sizes and geographic markets, ensuring findings reflected broad industry perspectives rather than narrow segments.

MediaLink continuously monitors the marketing industry and conducts research in partnership with clients looking to understand marketing, media, and technology trends affecting the business world. The firm employs professionals in New York, Los Angeles, Chicago, Atlanta, Nashville, and London. MediaLink is part of United Talent Agency, one of the most influential companies in global entertainment.

LoopMe was founded in 2012 and maintains headquarters in the UK, with global offices across New York, Boston, Atlanta, Chicago, Detroit, San Francisco, Los Angeles, Toronto, Singapore, Sydney, Melbourne, Dnipro, Krakow, Beijing, Shanghai, and Hong Kong. The company positions itself as the global leader in brand performance, redefining brand advertising for the digital and app ecosystem. LoopMe was the first to apply AI to brand advertising through its Intelligent Marketplace.

Timeline

• August-September 2025: MediaLink conducts research including 27 in-depth interviews and survey of 69 clients across multiple regions
• October 9, 2025: "Agentic AI and the Future of Brand Advertising" panel discusses findings at Advertising Week New York
• 2025-2029: Global market for brand-focused programmatic advertising projected to grow 13-15% annually, reaching beyond $18 billion
• September 14, 2025: Google unveils AI-powered advertising suite at Think Week
• September 16, 2025: Google announces Power Pack strategy combining AI Max and Performance Max campaigns
• July 2, 2025: Microsoft details how generative AI reshapes search and advertising landscape
• August 17, 2025: Consumer app marketers achieve 214% ROAS boost beyond major platforms
• October 18, 2025: Google search chief addresses AI transformation challenges

Summary

Who: MediaLink, strategic advisory firm serving media and marketing, conducted research commissioned by LoopMe involving 27 senior decision-makers and 69 client survey respondents across holding company agencies, mid-market agencies, advertisers, publishers, demand-side platforms, and supply-side platforms.

What: The study revealed that 84% of marketers observe consumer behavior shifts away from traditional search and web browsing toward AI-powered answer engines, with 45% planning to moderately or significantly shift brand budgets toward mobile in-app advertising within 12 months. The research identified key factors driving this shift including consumer time allocation to apps, higher engagement levels, improved targeting capabilities, and declining web ad effectiveness.

When: The research was conducted between August and September 2025, with findings presented at Advertising Week New York on October 9, 2025. The study projects the global market for brand-focused programmatic advertising at $18 billion in 2025, with 13-15% annual growth through 2029.

Where: The study covered North America, EMEA, and APAC markets, with the United States representing 58% of the global market opportunity and EMEA accounting for 18%. Mobile app environments emerged as preferred advertising channels compared to traditional web-based placements.

Why: AI-powered search tools like ChatGPT and similar platforms have altered information discovery patterns, causing web-based publishers to experience sustained traffic declines while mobile app engagement grows. Consumers spend an average of four hours daily with smartphones, primarily engaging with apps rather than web browsers, creating pressure on advertisers to reallocate budgets to environments where target audiences actually spend time.