AI Isn’t Solving Ad Tech’s Problems—It’s Just Expensive Theater – News Round Up: 10/24-10/31

The advertising industry has found its new security blanket: artificial intelligence. But strip away the conference keynotes and vendor pitches, and a concerning pattern emerges. While every ad tech company rushes to slap “AI-powered” on their pitch decks, the fundamental challenges plaguing digital advertising—measurement inconsistencies, walled garden dominance, creative mediocrity, and channel fragmentation—remain stubbornly unsolved. This week’s industry news reveals an uncomfortable truth: AI obsession isn’t driving innovation. It’s providing cover for the industry’s failure to address its core structural problems.

The AI ROI Mirage: Marketers Can’t Find the Money

Let’s start with the most damning evidence. Despite the relentless hype cycle, marketers are struggling to identify actual ROI from AI investments. According to Ad Age’s research, brands are pouring resources into AI tools and platforms, but when pressed on concrete returns, the responses become vague and aspirational. We hear about “efficiency gains” and “future-proofing,” but rarely hard numbers tied to business outcomes.

This shouldn’t surprise anyone paying attention. Digiday reports that while marketers are warming to AI conceptually, creative challenges and legal risks continue to loom large. Translation: the tools don’t actually solve the creative problem—they just automate mediocrity faster. When your fundamental issue is that programmatic advertising has commoditized creative into interchangeable units optimized for clicks rather than impact, making that process 10x faster doesn’t constitute innovation. It’s just expensive theater.

Even more revealing is OpenAI’s complete reversal on advertising. The company that once positioned itself above the advertising business model has now embraced it enthusiastically. Why? Because like every other tech platform before it, OpenAI discovered that advertising is the path of least resistance to monetization. This isn’t AI revolutionizing advertising—it’s advertising colonizing AI, same as it ever was.

Retail Media’s Reality Check: Growth Without Solutions

While AI dominates the narrative, retail media networks are experiencing their own reckoning. The sector that was supposed to be advertising’s salvation is hitting maturity faster than anyone expected. Digiday’s analysis reveals that “the easy dollars are gone” as retail media faces new tests approaching maturity. Brands are no longer throwing money at retail media simply because it exists—they’re demanding proof of incrementality and actual business impact.

The problem? There’s a point of diminishing returns, and retail media’s reckoning is on the horizon. As every retailer with a website launches their own media network, the value proposition fragments. Advertisers aren’t gaining efficiency—they’re managing complexity across dozens of proprietary platforms, each with different measurement standards, creative specifications, and reporting dashboards. We’ve recreated the walled garden problem at retail scale and called it innovation.

Even smaller players are feeling the pressure. Smaller retail media networks are attempting to step out from Amazon and Walmart’s shadow, but differentiation is proving difficult when everyone is selling the same basic value proposition: first-party data and closed-loop attribution. The reality is that retail media is reshaping marketer organizations—forcing them to hire more people to manage more platforms rather than simplifying their tech stacks.

CTV’s Growth Masks Fundamental Measurement Problems

Connected TV continues its impressive growth trajectory, with projections showing continued expansion through 2025. The sector is eating traditional linear TV’s lunch, and streaming platforms are printing money from political advertising—MadHive reports political CTV ad impressions tripled in October versus September.

But here’s what nobody wants to talk about: CTV is replicating cable’s fragmentation problem in digital form. We’re back to negotiating with dozens of platforms, each with proprietary measurement, incompatible frequency caps, and duplicated reach. The industry celebrates CTV’s programmatic capabilities while ignoring that we’ve simply moved the same fundamental inefficiencies to a new screen.

The Social Platform Shuffle: Old Problems, New Interfaces

Social platforms aren’t immune to these patterns either. Facebook’s loss of cultural relevance among younger users isn’t being solved by Meta’s AI investments—it’s a brand problem that requires understanding why the platform no longer serves social needs for Gen Z. Meanwhile, TikTok has become Gen Z’s search engine of choice, not because of superior AI, but because it delivers information in a format that matches how younger consumers want to discover content.

The lesson? Platform success isn’t about having the most sophisticated AI. It’s about solving actual user problems and creating genuine value. Something the ad tech industry seems determined to avoid acknowledging.

What Actually Needs Fixing

The advertising industry’s real innovation problems aren’t getting solved by AI agents or machine learning models. We need:

Standardized cross-platform measurement that actually works, not 47 different attribution models
Creative that respects audience intelligence rather than optimizing for the lowest common denominator
Simplified tech stacks that reduce complexity rather than adding layers
Honest incrementality testing that proves advertising’s actual business impact
Privacy-compliant solutions that don’t depend on surveillance infrastructure

None of these problems are solved by adding “AI-powered” to the feature list. They require hard work, industry coordination, and admitting that our current approach isn’t working. But that’s significantly less sexy than promising that AI will magically fix everything.

The next twelve months will separate the AI marketing theater from companies actually building solutions to advertising’s structural problems. Spoiler alert: most of the noise you’re hearing right now falls into the former category. The real innovators are the ones talking about boring things like measurement standardization and creative effectiveness—not the ones promising that their proprietary AI will revolutionize everything.

Until the industry stops using AI as a distraction from its fundamental problems, we’ll continue seeing impressive-sounding technology that fails to deliver on its promises. The revolution isn’t being televised—because it isn’t happening.

Why Ad Tech’s AI Obsession Is Masking Real Innovation Problems – News Round Up: 10/24-10/31