Advertising Trends in 2026: Which Formats Are Growing and How AI Is Changing the Rules

Where the Advertising Market Is Heading in 2026

Published in July 2026, IAB Europe’s AdEx Benchmark 2025 overview reports that European digital advertising spending grew by 10.5% in 2025 to approximately €131 billion. Video advertising grew by 19.6%, social video by 25.7%, and retail media by 16.7%. For the first time, video accounted for more than half of European display investment. These categories overlap and should not be added together. Source: IAB Europe.

This distinction matters when discussing the future of banner advertising. In market reports, “display” does not necessarily mean static or HTML5 banners alone. Growth in the broader category does not establish that demand for traditional banners is also increasing.

In the United States, IAB raised its full-year 2026 advertising spending growth forecast to 12.3% in September. Social media, connected TV, and commerce media were expected to grow fastest. These figures are forecasts for the full year, rather than final recorded results. Source: IAB.

For Lithuanian businesses, these figures provide useful directional context. However, US or Europe-wide growth rates cannot simply be applied to Lithuania. IAB Europe describes Nordic and Baltic markets as closer to flat growth in 2025, with differences between individual markets. Local budgets should therefore reflect actual audience size, available advertising inventory, and the advertiser’s own sales data.

Which Advertising Formats Are Gaining Momentum

Short Vertical Video

Reels, Shorts, and TikTok-style content give advertisers a quick way to demonstrate a product, show a use case, or explain a solution. Growth in European social video advertising supports the importance of this direction, but a vertical aspect ratio alone does not guarantee performance.

A useful creative principle is to give each video one main argument. A household cleaning product ad, for example, could demonstrate cleaning a particular surface, explain the correct dosage, or compare the cost per use. Trying to include the entire product range, brand history, and promotional terms in the same short video makes the message harder to follow.

Short video ads should communicate their core message even without sound. Captions, a clearly visible product, and an identifiable action help viewers understand the offer. Audio can add emotion, but it should not be the only way to make sense of the ad.

Testing should go beyond changing the background or music. Comparing different openings can reveal more: a problem, a demonstration, an unexpected question, or a customer objection. These variations help establish which argument matters most to the audience.

Creator Advertising and UGC Style Content

Creator advertising presents a product through someone’s experience, communication style, and relationship with their audience. UGC stands for user-generated content, although the advertising industry also uses the term for commissioned videos that resemble everyday product recommendations.

The distinction matters. A paid creator endorsement is not an independent customer review, and an AI-generated character should not be presented as a real customer who has personally tested a product.

In March 2026, Meta introduced additional creator and product discovery features, including an expansion of product links in Reels in selected markets. This reflects the company’s efforts to connect creator content more closely with shopping. Availability depends on the country and account. Source: Meta.

Businesses should treat creator content as an asset with clearly agreed usage rights. Establish whether a video can run in paid campaigns, be shortened, be adapted for other markets, and how long those permissions last. Follower count is only one selection criterion. Product relevance, audience fit, and the ability to demonstrate use convincingly can provide a stronger basis for choosing a partner.

Shoppable Advertising and Direct Product Access

Shoppable advertising connects content with a specific product or purchasing action. Examples include product tags in videos, product cards, and catalog ads that lead directly to the relevant offer.

The value becomes clear once an ad has created interest in a particular item. Someone who sees a hiking backpack should be able to find that exact model, its capacity, price, and delivery terms easily. Sending them to a general store homepage forces them to begin the search again.

Before investing in more creative variations, check the product information behind the ads. Is the advertised size in stock? Does the price match? Is completing the order straightforward on a phone? Even a persuasive video cannot compensate for a broken purchasing journey.

Retail Media and Advertising Based on Shopping Data

Retail media connects advertising with retailers’ media environments and shopping data. A typical example is a sponsored product in an online store’s search results. Across the broader ecosystem, ads can also appear outside a retailer’s own website.

The appeal is straightforward: someone is already interested in a product category, so the ad appears close to the moment of choice. However, a purchase occurring after an ad impression does not automatically prove that the advertising generated an additional sale.

A loyal customer, for example, may already have intended to buy the same product. Campaign evaluation should distinguish between new-to-brand buyers, repeat purchases, and incremental sales that would not have happened without the advertising.

Reporting scope also matters. IAB Europe’s €13.3 billion retail media figure covers search and display advertising within retailer-owned and operated environments. It is not a total for every possible form of commerce advertising.

CTV and Advertising on the Big Screen

Connected TV, or CTV, refers to television environments connected to the internet. Advertising on these screens combines television’s visual presentation with digital planning capabilities.

The viewing situation differs from a phone. A television ad may be watched from farther away, sometimes by several people at once. Small text, complex instructions, and messages that depend on a click are less suitable for this setting.

CTV campaigns should consider reach, frequency, and the additional audience delivered beyond other channels. A QR code can provide a route to action, but scan counts do not capture every possible effect of the advertising.

In a smaller market, the first question should be specific: which audiences can actually be reached, and through which apps or services? International CTV growth does not mean the channel already offers sufficient scale for every Lithuanian advertiser.

The Latest Advertising Platform Updates

Meta October Updates Put More Emphasis on Attention

On October 15, Search Engine Land highlighted four developments from Meta’s announcement: Ads Super Burst, First Impression Ads, expanded Reels Trending Ads capabilities, and Aggregated View Time.

Ads Super Burst is designed to concentrate reach within a window of three to 24 hours. First Impression Ads is being tested in the United States as an exclusive first ad placement when users open their Facebook Feed. Aggregated View Time, an early-stage test, measures cumulative viewing time across multiple exposures. Availability varies: some features are rolling out in phases, while others remain limited tests. Source: Search Engine Land, October 15, 2026.

These developments create potential opportunities for planning product launches and short, intensive campaigns. However, reaching a large audience in a single day is valuable only when the message is clear and the business is ready to respond to the resulting interest.

For publishers, this also reinforces the potential of exclusive placements and visibility during a defined period as distinct advertising products. Their value should be supported by meaningful audience exposure, rather than the physical size of the placement alone.

Google Is Testing Advertising Within AI Answers

In May 2026, Google announced tests of Conversational Discovery and Highlighted Answers ads in AI search. The first adapts an advertising response to a specific question. The second allows a clearly labeled ad to appear within a list of recommendations.

Google also announced an expansion of its Direct Offers pilot and introduced the direction for Business Agent for Leads, which lets users start a conversation with a brand agent within an ad. These announcements describe tests and rollout plans; they should not be treated as features available to every advertiser in Lithuania. Source: Google.

These formats need more than a short slogan. When someone searches for a product suited to particular conditions, the system needs accurate features, limitations, and offer details. The practical implication is that product information quality becomes part of an advertiser’s ability to compete.

AI Assistants Are Becoming Part of Campaign Workflows

At Google Marketing Live 2026, Google introduced Ask Advisor, a Gemini-based agent spanning several advertising and analytics products. Meta has also announced tests and expansion plans for an AI business assistant for advertisers. Sources: Google and Meta.

This changes how specialists can work: some questions about campaign performance can be asked in everyday language. However, an assistant’s response is only as useful as the information available to it. Incorrect conversion tracking and incomplete sales data remain problems even when AI writes the explanation.

How AI Is Changing Advertising Creative

Producing More Variations Is Becoming Easier

Generative AI can help develop scripts, visual concepts, copy adaptations, and versions for different formats. Google’s 2026 Asset Studio updates emphasize generating assets from a brief, brand guidelines, and website information, with editing through natural-language instructions. Source: Google Asset Studio.

For businesses, this can shorten the path from an idea to its first test. Instead of producing a single video ad, a team could develop three concepts: saving money, ease of use, and solving a specific problem. Giving each concept two openings produces six meaningfully different variations.

However, twenty nearly identical images do not represent twenty distinct hypotheses. A useful test should inform a decision: which argument to strengthen, which objection to address, or which audience finds the offer most relevant.

Product Accuracy Becomes a Quality Control Priority

An AI-generated ad may contain an incorrect label, an altered product shape, or an impossible usage result. These mistakes matter particularly when someone is buying a specific product rather than responding to a general lifestyle impression.

A practical approach is to use an accurate product image and verified claims as the foundation. AI can help create environments, script variations, and adaptations, but the final output still needs to be checked for what it actually shows and promises.

Advertising teams should also review whether localized copy sounds natural. A literal translation may preserve a tone, sentence structure, or selling point that works in the original market but feels wrong elsewhere. For Lithuanian campaigns, for example, the message needs to make sense locally. Localization means adapting the offer and its presentation, not simply replacing words.

How AI Is Changing Campaign Optimization

The outcome of automation depends on the action the system is being taught to value. A completed inquiry form, a qualified lead, and a paid sale are different results.

Suppose two campaigns each generate 100 inquiries. One costs €5 per inquiry, while the other costs €10. The first appears twice as efficient. But if the first campaign produces two sales and the second produces ten, their advertising costs per sale are €250 and €100 respectively.

This illustrative calculation shows why the optimization objective needs to match the business outcome. Where possible, campaign evaluation should connect to sales quality, margins, and returns.

AI can help identify anomalies or summarize data, but someone still has to decide what success means. If the greatest value comes from profitable repeat customers, the cheapest first order may be the wrong target.

SEO and Visibility in AI Search

AI answers are changing how people discover and compare information. Businesses need their product features, pricing, and expertise to be understandable to both readers and search systems.

Google’s documentation says that the fundamentals of SEO remain relevant to AI Overviews and AI Mode: accessible and indexable content, usefulness, clear textual information, and website quality. A special AI file or unique structured data type is not required simply to appear in these features. Source: Google Search Central.

In practice, businesses should build pages that answer real purchasing questions. Who is the product suitable for? Under what conditions should it not be used? How do two models differ? What does the price include?

Comparison tables, usage examples, and clearly stated limitations help reduce uncertainty for the customer. They do not guarantee that an AI system will recommend a particular brand.

It is also important to distinguish two kinds of visibility. A paid ad placement in an AI environment is a commercial impression. An organic brand mention or citation in an AI answer is a separate outcome. Buying one does not automatically secure the other.

Do Traditional Banner Ads Still Have a Role

A banner’s value should be assessed against its purpose. It can remind people about an offer, maintain a campaign’s visual recognition, reach a particular publisher’s audience, or reinforce video advertising.

Problems arise when a banner is automatically judged by its ability to generate clicks even though the campaign’s real objective is awareness. A high click-through rate does not establish whether the ad was memorable, whether the visitor was relevant, or whether a purchase followed.

Publishers and advertisers should agree on clear quality criteria, including viewability, frequency, placement, and actual rendering. Technical checks should cover different screens, correct destinations, working assets, and the assignment of the intended creative version.

Automation has a concrete role here. It can check file structures, dimensions, file sizes, and links, and generate proof of delivery. Rules-based validation works well for objective requirements, while AI can help flag visual or language inconsistencies.

Campaign quality depends on the entire process, from the creative idea to whether the ad actually appeared in the right place at the intended time.

How to Choose an Advertising Format for Your Business Goal

This table is a planning guide rather than a universal performance ranking. The same format can serve several purposes when the message, audience, and measurement approach change.

A Practical 30 Day Action Plan

During the first week, focus on measurement. Choose one main business objective, check conversion tracking, and establish whether reporting can distinguish new customers from existing ones. Review the destination of each ad and identify obvious obstacles on mobile devices.

During the second week, develop three creative hypotheses. These might focus on convenience, financial value, and the result of using the product. Create two openings for each while keeping the offer consistent. AI can support ideation and adaptation, while product facts should remain verified.

During the third week, run a controlled test. Limit the number of changing elements enough to understand what caused any difference. Avoid drawing daily conclusions from a handful of conversions, and account for the actual buying cycle.

During the fourth week, decide what deserves more investment. Consider actual orders, lead quality, and sales margins alongside the return reported by the platform. Keep a new format when its contribution to the campaign is clear.

Frequently Asked Questions

Which Advertising Formats Are Most Popular in 2026

Market growth figures highlight social video, CTV, and retail media. Creator content and formats that provide a direct path to a product are also relevant. Popularity does not establish which format will be most profitable for a particular business.

Is AI Advertising Always Cheaper

AI can reduce some production and adaptation costs. However, the total includes testing, selection, revisions, and quality control. An inexpensive ad is not necessarily an inexpensive way to acquire a customer.

Will AI Replace Advertising Specialists

AI can take over some repetitive tasks and speed up analysis. Specialists remain responsible for setting objectives, checking data, assessing creative work, and making budget decisions. The nature of the work is changing more than the need for accountability.

Should Businesses Replace Banners With Video Advertising

A format’s growing popularity is not sufficient reason to move the entire budget. Businesses should assess the audience each channel reaches and the additional results it contributes. Video advertising and banners can complement each other.

How Can a Business Improve Its Visibility in AI Search

Start with technical SEO, accurate product information, and clear content. Specific answers, comparisons, and verifiable facts are useful foundations. Paid advertising and organic mentions in AI answers should be evaluated separately.

Where Should a Small Business Start

Begin with one offer, one main objective, and a few meaningfully different ads. With a small budget, avoid spreading investment across so many channels that none produces enough data to support a decision.

What Will Help Businesses Stay Competitive

The changes shaping advertising in 2026 give businesses good reasons to invest in product information, creative testing, and measurement quality. New formats provide additional ways to reach audiences, while AI makes it possible to prepare and adapt content more quickly.

Competitive advantage comes from connecting these capabilities to a specific customer problem. Advertising should communicate value clearly, the purchasing journey should help customers obtain it, and measurement should show whether the investment worked. Strengthening that sequence is a useful priority before increasing spending or adding another automation tool.