It’s going to be an unpredictable, turbulent year. Things seem to be moving fast and digital marketing will need to be a key driver for sales and stability for a lot of businesses.

With this in mind, we have brought together 5 things which challenge digital marketers this year.

AI Search

Generative AI began usurping the SERPs through 2024. AI generated results are now embedded on Google and Microsoft. The mixture of AI and ‘original’ results on the page has left analysis of the impact difficult. How are search terms, impressions and clicks affected - particularly if the search leads to a conversation with AI to find the answer?

In 2025 this AI generated search experience will deepen - accelerating the need for analysis. One way of understanding how AI is actually changing search is by focusing on Perplexity.

Perplexity is an AI search engine which saw huge growth - and investment - in 2024, ending with a valuation of $9bn and an estimated 0.5% search share. That may sound small but this is a highly competitive area to make headway in. Just ask Microsoft.

SEL reported on analysis comparing the results from Google to Perplexity, which found a high overlap in sources and links, with some exceptions. Perpexity looks to social media with a higher regularity - putting more weight on information from Reddit, for example.

The bigger point here is a shift from thinking about rankings and links, in favour of citations and authority. AI results generate the answer based on citations and authority levels derived from the model’s architecture. In 2025, SEO strategy will need to transition towards focusing on this ‘citation rate’ with greater weighting.

A similar shift will need to happen with the optimising of product feeds and listings to ensure they maintain relevancy for AI shopping search.

A new AI breakthrough

2025 will likely see a new step change in AI models capability, similar to the ChatGPT 3.5 revolution of two years ago. It will come from AGI (Artificial General Intelligence) models, aimed at mimicking a capability which can apply itself to diverse problems and learn from them, as humans do.

What are the grounds for thinking we will see a step change here? Open AI released their o3 model in Dec, which scored much more highly on AGI benchmarks than any previous model. If the cost of compute can come down and the model be opened up to public access, then this could set off a new round of excitement as the idea of AGI will suddenly become real, reachable and tangible, rather than theoretical. Of course, if and when we actually see an AGI model working is another matter.

MMM

Marketing Mix Models have become granular, flexible, fast, and available to advertisers of all sizes and budgets. The need for them is also more pressing - post-cookies and privacy centric, tying together and measuring your marketing mix is impossible without robust MMM feedback.

For all these reasons, in 2025 MMM will boom and Kinase’s MMM offering will grow. In amidst the boom will be the launch of Google’s open access Meridian model, which will offer YouTube and Google search data, but will also provide one model and one answer. Great to have the data, but another example of Google offering to mark its own homework.

The Trump Effect

Donald Trump’s second presidency is going to dominate the news, and potentially trade and economic conditions.

We’ve already seen Mark Zuckerberg rolling back content moderation across Meta properties, falling into line with Musk’s X and the Community Notes style of self-reporting. We will see if this has an impact on the effectiveness of Meta ads, and on advertisers’ willingness to appear there.

Trump has also pledged to save Tiktok - from the banning process which he started last time he was in power. Now he seems to see it as a way to keep Meta in check and curb Zuckerberg’s power. Trump’s view of silicon valley is a reformist one - as can be seen from his appointment of Sriram Krishnan as AI policy lead. Krishnan’s background at Andreessen Horowitz and as a venture capitalist and silicon valley insider, this is clearly a reformist and not a disruptive move.

The biggest impact for businesses lies in potential trade tariffs. Mexico, Canada, all of the EU, China… the list of countries he has threatened already with tariffs is long. It’s a bargaining tactic - and also a reality which will affect the global economy, because supply chains will inevitably be disrupted and re-priced. It could drive global inflation - and the fear of inflation, as the timing of tariffs is as yet unknown.

Economic Outlook

Steady inflation levels are predicted for 2025, although Trump’s tariff schedule may unsettle this. In the UK, the CPI Inflation rate was 2.6% in Nov - with expectations for a rise to 2.8% (BoE) by H2 2025, before easing again at the end of 2025.

Aligned to this is an outlook of muted UK GDP growth. A bullish view is currently 1.7% for the year, although it’s possible it will be closer to 1% or even lower.

For advertisers, it will be a year of strong competition to maintain low levels of growth. For verticals where growth is higher, fierce competition and new entrants looking to establish themselves.