The seemingly inexorable rise of advertising tech will see AI-driven adspend in the UK hit £18bn within four years, representing around 32% of total digital spend, although trust in agentic tools remains a major issue.
“The State of AI in Advertising: Charting the Shift from Automation to Autonomy” from IAB UK examines how generative and agentic AI are reshaping the advertising ecosystem, from creative production and search to programmatic trading and commerce.
The study finds the market is rapidly moving beyond first-generation automation towards more autonomous AI systems capable of orchestrating planning, optimisation, and execution across campaigns.
More than half (58%) of IAB UK members say they are already experimenting with or piloting agentic AI within their organisations, while a further 16% say they are scaling agentic systems or operating “agent-first” marketing workflows.
The strongest near-term commercial impact is expected to come through AI-powered buying solutions in search, social and programmatic advertising, with platforms increasingly embedding AI optimisation directly into campaign delivery systems.
The report identifies creative production as one of the most mature AI use cases in the market today, with 63% of IAB UK members expecting AI to have an accelerating or transformative impact on creative development over the next 12 months.
At the same time, the industry is grappling with major structural changes to search and discovery as AI-generated answers reduce click-through traffic and shift value towards “share of model” visibility within large language models and AI assistants.
Almost two thirds of advertisers say they have already introduced changes to website structure, metadata, and content strategies in response to the rise of generative engine optimisation (GEO), while 74% believe AI summaries are reducing traffic to brand websites.
The report suggests that while AI adoption is accelerating across the ecosystem, the market remains in a transitional phase between experimentation and operational transformation.
Only 4% of IAB UK members currently consider themselves fully “agent-first”, with concerns around transparency, governance, data security and accountability continuing to limit adoption of fully autonomous systems.
Trust remains a significant issue across the supply chain. Almost half (47%) of advertisers say they do not trust AI agents in advertising because of a lack of transparency in decision-making, rising to 67% among IAB UK members.
The report also highlights growing industry concern around standardisation, interoperability and governance as competing agentic frameworks emerge across media and commerce environments.
IAB UK chief strategy officer James Chandler said: “The industry is entering a new phase of AI adoption where the conversation is no longer simply about efficiency gains or workflow automation. We are now seeing the emergence of agentic systems that can actively participate in media planning, optimisation, creative adaptation and commerce.
“The opportunity is significant, but the industry also needs to solve for transparency, accountability and interoperability if AI is to scale sustainably.”
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