Summer Essentials: High Performance Surfboard

Introduction

Businesses are undergoing a once-in-a-lifetime transformation, driven by AI. CMOs leading the pack on AI transformation are at the center of this enterprise reinvention, becoming the go-to C-suite leader for CEOs and boards.

Leading CMOs are addressing both the possibilities of AI and the seismic shift in consumer behavior. Consumer journeys today are anything but linear. People move fluidly across searching, streaming, scrolling, and shopping -- often simultaneously. The marketing funnel that worked for decades has lost relevance.

The possibilities offered by AI are near-infinite, but the practical barriers to execution can be daunting. This report distills lessons from the first half of 2025, bringing key insights across the 'what' and the 'how' from top CMOs, agency leaders, Boston Consulting Group (BCG), and leaders within Google who are building the AI solutions of the future.

Inside, you'll find actionable insights on:

• Moving past the funnel and meeting the needs of predictably unpredictable consumers.
• Capitalizing on opportunities created by the future of advertising -- a future that is here, now.
• Closing the gap between experimentation and impact by scaling AI for media, creative, and performance.
• Tapping into culture and communities by leveraging YouTube creators as strategic partners.
• Building AI strength across data, content, and agentic capabilities, and driving performance using the Google Ads Power Pack.

The bottom line is clear: We are at a turning point. We hope this report helps you plan with greater confidence -- and take action with clarity.

Chapter 1: The Predictably Unpredictable Consumer

Executive Summary: Today's consumer journeys are nonlinear, with people searching, streaming, scrolling, and shopping across devices, simultaneously. Marketers must adapt their plans to these evolving behaviors.

The traditional funnel no longer reflects how consumers make decisions. Journeys are nonlinear and depend on behavior, context, and immediacy of need. Influence over consumer decisions is a function of attention, relevance, and trust -- not just visibility or reach.

Marketers can use influence maps to meet consumers where they are and adapt their messaging based on customer persona and context at each stage of the journey. It's important to be where your customers are: A majority of shoppers (61%) interact with 5+ touchpoints in their online purchase journeys; Google or YouTube are present in 86% of those journeys.

AI can help prioritize influence pathways to improve the effectiveness and efficiency of marketing investments.

Consumers interact with over 130 mobile touchpoints a day, alongside connected TVs, laptops, smartwatches, and tablets. Consumers move seamlessly and simultaneously across these devices for searching, streaming, scrolling, and shopping (the '4S' behaviors). These behaviors have fundamentally reshaped how consumers discover and engage with brands.

Farewell, Funnel: A linear funnel no longer reflects consumer decision-making. Consumers jump between behaviors, often repeating or skipping steps. Marketers need a more flexible framework that aligns with consumers' actual journeys.

Be Where Your Customers Are and Adapt How You Show Up: The rise of the 4S behaviors unlocks new opportunities. Marketers need to be where their customers are, in real time. Google or YouTube are present in 86% of online purchase journeys, higher than any other online platform.

Influence is determined by three factors:

1. The level of attention a consumer gives at any given moment.
2. The relevance of the content to the consumer's needs.
3. The consumer's degree of trust in the touchpoint or platform.

Marketers can define influence maps for their key consumer segments and use them to prioritize investments. AI can help create maps that reveal which behaviors carry the greatest influence at each stage of the consumer journey.

Understanding the Predictably Unpredictable Consumer: Influence maps offer a more accurate representation of consumer journeys compared to linear funnels. Examples include using YouTube for shoppable ads, vertical live streams for discovery and purchase, Google Search for finding ideas and closing deals, and in-store browsing combined with Google Ads remarketing for purchases.

Take an Expansive View of Where AI Can Help: Success requires a scaled approach to AI, not just to synthesize complexity but also to maximize marketing impact. This involves looking at processes end-to-end and identifying where AI can play a role, then prioritizing AI pilot deployments.

Industry Inspiration:

• Hilton: Developed an AI-powered YouTube and Search strategy to capture inspiration-led travelers, connecting "in-the-moment" intent with relevant creative, leading to double-digit incremental revenue growth.
• Rare Beauty: Leaned into AI-powered ad solutions to reach a Gen Z audience, incorporating YouTube into their Search strategy and achieving a 7X return on ad spend.

What's Next: AI is reshaping advertising and marketing, creating new growth opportunities.

Chapter 2: The Future of Advertising

Executive Summary: The future of advertising, fueled by AI, is already here. Innovations in AI-powered discovery, multimodal understanding, and agentic action allow marketers to influence consumers as they search, stream, scroll, and shop.

AI is reshaping advertising through AI-powered discovery, multimodal understanding, and agentic action. Discovery is evolving from information to intelligence, with AI Overviews and AI Mode in Search enabling complex, multistep interactions. Multimodal capabilities, like Google Lens and Try On, capture intent across text, image, video, voice, and real-world inputs. Shoppers and marketers can leverage agentic technology, such as new checkout experiences, which autonomously complete tasks for shoppers.

These innovations allow marketers to reach consumers with personalized, privacy-safe, and performance-driven ads that appear at the right moments.

AI-Powered Discovery: Discovery is evolving from information to intelligence as AI capabilities allow users to have complex, multistep interactions with Search. Google sees 5 trillion searches annually, and YouTube leads in reach and watchtime. AI Overviews deliver comprehensive responses within Search results, driving query growth. AI Mode expands these capabilities with advanced reasoning, multimodality, and conversational follow-ups, allowing for longer, more complex queries.

Multimodal Understanding: Intent is no longer limited to typed queries. People can search using text, images, video, voice, and real-world inputs. Google Lens has 25 billion searches a month, with one in five showing commercial intent. Circle to Search allows instant searching without switching apps. New shopping experiences combine Gemini capabilities with Google's Shopping Graph (over 50 billion product listings) to help shoppers browse, consider, and narrow down products.

Features like virtual try-on allow users to see how apparel looks on them by uploading a photo.

Agentic Action: Agentic technology anticipates needs, learns from data, and autonomously executes tasks. New agentic checkout experiences can help shoppers buy products at a price that fits their budget, reducing friction and boosting sales. Shoppers can tap "track price" and set their budget; an agent will notify them of price drops and can complete purchases once confirmed.

New Ways to Shop: The future of advertising is linked to AI possibilities. Marketers can use AI to make connections with consumers, drive creative impact, measure better, and make teams future-ready.

Chapter 3: Scaling Creative, Media, and Performance with AI

Executive Summary: To unlock the full potential of AI, companies must build connected systems that scale across media, creative, and measurement, supported by investments in people and process.

AI is reshaping marketing, but maturity varies. Only 19% of companies are considered AI leaders, connecting workflows and testing AI-assisted decisions. To close the gap between experimentation and impact, brands must embed AI across four interconnected functions: media and personalization, creative and content, measurement and insights, and people and process, forming an AI flywheel.

01 Media and Personalization: AI tools can increase efficiency by 24%. To unlock ROI, marketers need to know how to get the most out of their resources. Stages of maturity include Essentials (testing AI campaigns), Scaling (scaling campaigns with first-party data), Leading (deploying AI for high-value audiences), and Transforming (building and improving media plans with AI-powered engines).

Strong audience segmentation and fluid budget allocation are key strengths. Tools and workflows allowing real-time segmentation and flexible cross-channel budget allocation can bridge the gap. Off-the-shelf AI-powered campaigns offer faster testing and results.

Industry Inspiration:

• Lululemon: Implemented AI-powered shopping campaigns, tailoring ads to different customer segments, resulting in an 8% boost in return on ad spend.
• Bayer: Used AI to train Google's AI for value-based bidding to win more high-value customers for Iberogast, resulting in a 108% increase in high-value conversions.

02 Creative and Content: Leading brands embrace AI across the creative lifecycle for faster development, greater variation, and on-brand assets. AI can enable a ~6X increase in creative asset volume.

Businesses can generate on-brand assets that anticipate trends and seasonal moments while maintaining control. AI can fill gaps for seasonal assets, for example.

Industry Inspiration:

• Hatch: Used Gemini to create personas and ImageFX for visuals, driving an 80% uplift in click-through rate and a 31% improvement in cost per purchase.
• Touchland: Leveraged Gemini and Imagen for ad creative, reducing visual asset timeline by 90% and production costs by 70%, achieving 34% sweepstakes conversion rates.

03 Measurement and Insights: AI can be applied to optimize in real time, automating insights, reporting, and forecasting. Key approaches include Marketing Mix Models (MMM), data-driven attribution, and incrementality testing.

Meridian (Google's next-gen MMM) delivers clearer performance insights. Data-driven attribution models help assign credit to conversion steps, and incrementality experiments help understand real drivers of campaign performance.

04 People and Process: CMOs are positioned to drive growth in the AI era, but scaling and change management are challenges. Key factors are talent and cross-functional partnership.

Investments in people, such as hiring AI talent and encouraging experimentation, can help teams become AI-first. System-wide integration across functions is critical, requiring advocacy from finance, engineering, legal, HR, and product teams.

Industry Inspiration:

• H&R Block: Implemented a four-week AI training sprint, resulting in a 24% spike in AI marketing tool usage.

Agents for AI Acceleration: Powerful agentic capabilities are coming to Google Ads and Google Analytics to help with onboarding, campaign creation, reporting, and troubleshooting. Marketing Advisor, an agent coming to Chrome, can manage complex tasks across platforms and offers a multimodal experience.

Chapter 4: Creators as Strategic Partners

Executive Summary: Creators are pivotal strategic partners for marketers, enabling authentic connections through culture and communities. Brands that leverage creators tap into their strength across culture, communities, and video.

Culture and community are critical for authentic consumer connections. Creators are at the center of culture and community, with active fandoms that shape culture. YouTube creators are pioneering the new TV, moving across formats with ease. Creators are core to shopping, acting as storytellers and trusted sales drivers; 81% of U.S. viewers agree that content from YouTube creators helps them research and discover products, surpassing other social media platforms.

Creators Shape Culture and Build Powerful Communities: Brands engaging creators as strategic partners can tap into culture and communities. YouTube creators are pioneering the new TV, which is unconstrained by format, genre, and style. People watch over 1 billion hours of YouTube daily on their TV screens.

Creators move across formats with ease on YouTube, from long-form entertainment to live events, short-form video, and podcasts. Over 1 billion people watch podcasts on YouTube each month.

Creator Communities Run Deep: Creators build loyalty and trust through intimate connections with audiences. This connection, combined with vast reach, allows creators to rival or surpass the audience impact of traditional productions. Creator fandoms don't just follow culture, they shape it.

81% of U.S. viewers agree that content from YouTube creators helps them research and discover products, outperforming other social media platforms. YouTube drives higher long-term ROAS than TV, online video, and paid social.

Creators are Core to Shopping: Brands need to be chosen, not just seen. Moving shoppers from discovery to decision requires trust, depth, and genuine connection. YouTube's engagement and creator trust are unique. In the past 12 months, YouTube ads on connected TV screens drove over 1 billion conversions, and 82% of viewers believe YouTube has the most trusted creators.

Creators help shoppers cut through choices, reduce research time, and boost confidence. They are storytellers and sales drivers, inspiring action in native and relevant formats.

Industry Inspiration:

• Urban Decay: Teamed with beauty creators for authentic product application videos on YouTube Shorts, yielding a 278% surge in search lift.
• Samsung: Partnered with MrBeast to test Galaxy S24 features, generating 25 million impressions and a 6% lift in brand searches.
• Uber: Partnered with Pantons Squad to promote Teen Accounts, achieving significant brand lift results and a 24% increase in parent awareness.
• Volvo: Partnered with Chloe Flower to remix EV sounds into original compositions for a YouTube ad, achieving 44% view-through rates, 24% above the auto industry benchmark.

What's Next: Consumer behavior is shifting, AI is accelerating, and creators are reshaping culture. The opportunity is clear.

Chapter 5: Your Action Plan: Future-Ready, Now

Executive Summary: This summer marks a crucial moment for marketers to become future-ready by strategically building AI strength. The updated Google Ads AI Essentials 2.0 framework provides a clear guide across three core areas: AI Data Strength, AI Content Strength, and AI Performance Strength.

Holiday and annual planning are around the corner. Align your team, sharpen your strategy, and get ready to scale. What you do in the coming weeks will shape how you show up in the coming months.

Meet the Google Ads AI Essentials 2.0:

• AI Data Strength: Connect first-party data to unlock new signals for performance and measure incrementality with experiments. Upgrade your tag in Data Manager. Use data sources like your website and CRM. Measure incrementality with experiments across campaign types with lower budget requirements. Optimize your budget with Meridian and Budgeting Tool in Google Analytics.
• AI Content Strength: Create user-focused content for paid media and leverage Creator Partnerships. Craft helpful content, measure true value, and build quality with AI for SEO. Generate high-quality creative assets through Asset Studio and explore image-to-video capabilities. Access format controls in Video view campaigns and help maximize reach of non-skippable ads with Video reach campaigns.
• AI Performance Strength: The Power Pack: This is the next generation of AI-powered campaign solutions, built for the new era of Search and multimodal experiences. It drives performance across Search and YouTube, using Performance Max, AI Max for Search campaigns, and Demand Gen.

Performance Max: Set up asset best practices, opt into final URL expansion. Performance Max offers more visibility and control, including search terms reporting, channel performance reporting, and diagnostics.

Search Ads: Activate AI Max for Search campaigns to drive performance on new, relevant queries and expand reach to AI surfaces with personalized creatives and landing pages. Google AI supercharges ad performance with targeting and creative enhancements.

Demand Gen: Set up look-alike audiences and adopt video enhancements. Use channel controls to customize your media mix. Create and capture demand across Google's most visual surfaces, including YouTube, Shorts, Discover, Gmail, and Google Display Network.

Agentic capabilities: Get personalized help from AI agents in Google Ads and Analytics for needs across the web. Marketing Advisor can manage complex tasks, offer recommendations, and execute tasks with permission.

Ready to boost your team's success? Sign up for Accelerate with Google at g.co/business/accelerate for the latest product announcements, online events, certifications, and more.

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