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The advertising agency world is at a crossroads.
After years of mounting pressure, the forces reshaping the industry have reached a critical threshold. It's one that threatens not just how agencies operate, but whether the business model that has sustained them for decades can survive. Client relationships are more strained. Profits are shrinking. Tech stacks are sprawling. And AI—the technology most agencies are counting on to turn things around—is poised to reshape everything from revenue models to headcount.
To understand what this moment means for the advertising industry, Basis surveyed more than 200 professionals at leading agencies, exploring how they feel about their jobs, their agencies, and the forces shaping their futures.
Select findings include:
Despite these challenges, advertising agencies still have ample opportunity. Global advertising spend is projected to cross $1 trillion for the first time in 2026, and brands still need partners who can help them navigate an increasingly complex media landscape. But the agencies best positioned to capture that opportunity may look very different from those that have dominated the last decade.
Download the full report today for the complete findings, along with strategic takeaways for agency leaders navigating the road ahead.
Every election cycle, political campaigns compete with nonpolitical advertisers for the same inventory—driving up costs, limiting availability, and creating brand safety challenges. In 2026, that pressure is set to reach new heights.
The 2026 midterm elections are on track to be the most expensive midterms in US history. Political ad spending this cycle is projected to reach $10.8 billion, a 20%-plus increase over the 2022 midterms’ $8.9 billion and nearly on par with the $11.2 billion spent during the 2024 presidential cycle.
The forces driving that spending are significant. Control of both chambers of Congress is up for grabs, with 35 Senate seats in play, including special elections in Florida and Ohio. All 435 House seats will be contested, and a record number of House members are not seeking reelection, creating open-seat races where neither candidate benefits from incumbency. And with a deeply unpopular president, a war started without congressional authorization, and rocketing gas prices setting the backdrop for the cycle, the political environment is primed for aggressive spending on both sides.
For nonpolitical advertisers, this translates to tighter inventory, higher CPMs, platform-specific restrictions, and heightened brand safety concerns across channels. That complexity is compounded by challenges resulting from a fragmented media environment and the rise of AI-generated content. Here’s what marketers need to know heading into peak political spending:
Key Takeaways:
During the 2024 election cycle, political ad spending totaled $11.2 billion, with the presidential race alone accounting for $3.2 billion. Without that top-of-ticket race in 2026, spending will concentrate more heavily on congressional and gubernatorial contests—especially in the states and media markets where those races are most competitive.
On the Senate side, spending is projected to hit $2.8 billion, slightly surpassing the 2024 record. Georgia, Maine, Michigan, New Hampshire, and North Carolina are the cycle’s most closely watched races, with multiple contests likely to surpass $500 million in ad investment. States like Iowa, Nebraska, Ohio, and Texas could also attract significant spending as Democrats pursue pickup opportunities against a 53-47 Republican majority. And the pressure is building early: Campaigns are moving up their ad timelines to secure inventory before rising demand pushes them out of competitive markets.
Spending on House races, on the other hand, is projected to reach $2.2 billion, marking the first time spending on the chamber will exceed the $2 billion mark. With competitive seats concentrated in the New York and Los Angeles media markets—12 of the projected 40 competitive seats sit in those two metropolitan areas—nonpolitical advertisers in those regions will likely feel outsized pressure.
Gubernatorial spending is expected to hit $1.95 billion, with open seats in Georgia, Michigan, and Wisconsin driving substantial activity in those states. Arizona, Nevada, and New Jersey are also projected to see significant gubernatorial ad spending, with New Jersey’s race alone expected to more than triple its 2021 investment. And downballot spending, driven by ballot propositions and state legislative races, will account for 36% of all political ad spending, representing $3.9 billion.
The bottom line for nonpolitical advertisers is that political spending in 2026 will not be distributed evenly across the country. It will cluster in specific states, specific metropolitan areas, and specific channels.
Political advertising follows a predictable cadence. Historical data shows that roughly 50% of a cycle’s political dollars run in the 30 days before Election Day, with about 25% concentrated in the final 10 days. Early voting may push some of that spending slightly earlier in 2026, but the Labor Day-to-Election Day window will remain the period of highest intensity.
Sports programming will intensify the pressure. The FIFA World Cup, hosted in the US, Canada, and Mexico from June through July, will drive significant demand for sports-adjacent inventory, particularly on CTV and streaming platforms. That demand will overlap with the early stages of general election spending, which means CPMs in sports-adjacent inventory could start climbing well before the traditional September-through-November political window. Then, from Labor Day through Election Day, college football and the NFL will overlap directly with peak political ad spending. And with political advertisers increasingly using live sports as a targeting proxy—reaching voters in specific states and metropolitan areas based on the games they watch—nonpolitical advertisers competing for the same inventory in battleground states should expect particularly elevated CPMs during that window and plan their sports buys accordingly.
Geographically, the hottest markets will track directly with competitive races. States projected to see the highest total political spending include California ($1.1 billion), Michigan ($936 million), Georgia ($757 million), North Carolina ($669 million), and Texas ($556 million). Advertisers with heavy presence in those states should plan for elevated CPMs and limited premium inventory throughout Q3 and Q4.
Broadcast television still commands the largest share of political ad spend, at just under 50%. But that share is effectively flat from the last cycle, and broadcast revenue is actually declining slightly from 2024. The growth story is in CTV.
Connected TV is the only media channel projected to see increased spending over the 2024 presidential cycle. Spending on the channel is projected to reach $2.4 billion in 2026, up from $2.34 billion in 2024, and accounting for 23% of total political ad spend.
Several factors are accelerating this shift. First, cord-cutting continues to reshape the television market. Streaming captured 47.5% of all TV viewing in December 2025, while cable’s share continued to decline. As audiences—including older demographics who have historically been the most cable-loyal—continue migrating to streaming platforms, political advertisers are following them to CTV. At the same time, CTV’s targeting capabilities allow political advertisers to reach specific geographies and demographics with precision that broadcast cannot match.
For nonpolitical advertisers, this creates a compounding inventory challenge. Major CTV platforms like Netflix and Amazon Prime Video do not currently accept political advertising, which pushes political dollars more heavily into platforms that do: Hulu, Roku, YouTube, and others. That concentration effect means CPMs on those platforms will spike and inventory could be tight, particularly in competitive markets during the September-through-November window. On the flip side, those same political-ad-free platforms represent inventory that nonpolitical advertisers can access without competing against campaign dollars at all.
Beyond linear and connected TV, digital spending on social platforms like Facebook, Google, Snapchat, and X will account for an estimated 13% of total political spend this cycle, down from 15% during the 2024 presidential cycle. That decline is consistent with typical midterm cycles, where social media and digital as a whole command a smaller share of spend without a presidential race on the ballot. Still, nonpolitical advertisers in battleground states should expect increased competition for display and online video inventory. And as political content—both paid and organic—saturates social feeds in the weeks before Election Day, ad environment quality and brand adjacency becomes harder to control.
Audio, meanwhile, remains one of the most underutilized channels in the political media mix, despite consumers spending a significant and growing share of their media time with audio content. For nonpolitical brands looking for less congested environments during peak political season, programmatic audio may offer an efficient alternative.
With so many different channel- and platform-specific considerations, omnichannel visibility is particularly important in 2026. Advertisers who can see and adjust all of these dynamics from a single vantage point—shifting budgets from high-pressure CTV inventory to less contested audio or display, for example— will be better positioned to make proactive, considered decisions rather than scrambling to adjust when pricing spikes hit.
Brand safety is a perennial concern during election years. In 2026, the continued rise of AI-generated political content adds a new layer of complexity for political and nonpolitical advertisers alike.
Deepfake political ads are already running in midterm campaigns. In March 2026, the National Republican Senatorial Committee released an 85-second deepfake video of James Talarico, the Democratic Senate nominee in Texas, depicting a realistic but entirely fabricated version of the candidate reading old social media posts directly into the camera. Similar AI-generated attack ads have appeared in the Georgia Senate race and in state and local contests across the country.
There is no federal law governing the widespread use of AI in political advertising, and while 26 states have enacted some form of deepfake disclosure legislation, enforcement remains limited and laws vary widely in scope. At the same time, social media platforms like Meta and X have rolled back professional fact-checking programs in favor of community-based moderation, which can be slower to catch synthetic content, if it catches it at all.
For nonpolitical advertisers, this means the content environment around political news coverage, political ads, and social media will be more volatile and less predictable in 2026. The specific risks will vary by channel and by advertiser. Consider a healthcare brand whose display ads unexpectedly appear alongside coverage of an abortion ballot initiative, or a family-oriented retailer whose pre-roll video ads run ahead of an AI-generated political attack ad on YouTube. The brand safety risk is meaningful even when the adjacency is accidental. Three-quarters of consumers feel less favorably toward brands that advertise on sites that spread misinformation, and ads that avoid risky political content see a 32% lower cost per conversion and significantly higher success rate than those that appear alongside it.
Brand safety controls—including site-level block lists, keyword exclusions, and contextual targeting—will be critical, particularly for display and online video placements where ads appear directly alongside editorial and user-generated content. CTV presents fewer adjacency risks because ads appear within streaming content rather than alongside it. Agility is a major competitive advantage considering the brand safety risks that accompany the midterms. Advertisers who can quickly adjust placements, update exclusion lists, and monitor brand safety across channels from a single, unified platform will be better equipped to respond when conditions shift—whether a deepfake goes viral, a controversial ad surfaces, or a political story dominates a news cycle.
Navigating a $10.8 billion political advertising cycle requires both planning and flexibility. Here are practical considerations for the months ahead:
The 2026 midterms will test nonpolitical advertisers' ability to maintain reach and performance in a historically expensive and complex media environment. With a record amount of political spending projected to flood broadcast TV, CTV, and digital channels, the pressure will be acute in battleground states and high-profile metropolitan areas from Labor Day through Election Day.
What makes this cycle particularly challenging is the convergence of multiple pressures at once: record midterm spending, a shifting CTV landscape where political dollars are concentrating on a subset of platforms, AI-generated content complicating brand safety, and major sports programming overlapping directly with peak political season. Advertisers who treat these as isolated issues rather than compounding ones risk being caught off guard by pricing spikes and inventory shortages that are already predictable.
The post-election window is worth planning for as well. November through December historically offers favorable pricing as political dollars exit the market. Brands that build their Q3 and Q4 pacing with that rebound in mind can recover reach and efficiency quickly.
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For more on how political advertising is shaping this year’s cycle, check out The Ultimate Guide to Political Advertising in 2026.
Lighthouse Digital Media partnered with Basis as part of its broader advertising operating system to strengthen campaign execution, improve efficiency, and scale performance across channels. Combining their strategic planning and optimization expertise with Basis’ automation and workflow capabilities, the team delivered measurable value and exceeded client expectations.
Lighthouse Digital Media is a full-service digital advertising partner specializing in search, social, video, programmatic, and analytics. They pair strategic planning with transparent reporting to deliver data-driven campaigns that exceed performance benchmarks, delivering measurable, repeatable results.
Lighthouse needed a unified platform to simplify multi-channel activation and billing while delivering strong click-through-rate (CTR) and video completion performance for a nine‑month financial services awareness campaign.
They needed a solution that enabled:
Lighthouse Digital Media approached this campaign by focusing on performance, operational efficiency, and brand integrity across a complex multi-channel activation. Lighthouse evaluated how to best manage campaign complexity while preserving the agility and hands-on optimization approach that differentiates its client work.
Basis served as the technology partner that enabled the Lighthouse team to efficiently activate campaigns, manage workflows, and optimize performance across tactics and channels—freeing the team to focus on strategy, audience insights, and performance refinement rather than administrative execution.
With a $182,000 budget and an 8-month campaign flight, Lighthouse developed and executed a cross-channel strategy that leveraged display and video tactics across multiple audience segments and targeting approaches.
Lighthouse leveraged Basis to execute a scalable, multi-channel campaign strategy while maintaining a high level of control and optimization throughout the engagement.
Results:
“Technology is most valuable when it enables smarter decision-making, not when it replaces it. Basis provides the infrastructure and efficiencies that allow our team to stay focused on what we do best: strategy, optimization, and delivering best possible results for our clients.” - Lighthouse Digital Media
Key Takeaways:
AI is transforming how consumers search online and what paid media can accomplish within those environments.
This transformation is resulting in three key shifts that marketers must understand to invest effectively in paid search:
For advertisers, understanding how to strategize around each of these shifts is essential to building a paid search strategy that holds up in an LLM-powered environment.
The search results page has always been a place where advertisers vie for attention, but AI is changing the terms of that competition. AI Overviews now dominate above-the-fold real estate on Google for about half of all queries, pushing paid and organic listings further down the page. As users opt to scan AI-generated summaries first and scroll less as a result, there are fewer moments for them to see and act upon your ads.
This attention compression directly affects paid search performance, with recent research finding that the presence of an AIO correlates with a 58% lower CTR for the top-ranking page. As advertisers compete for fewer available clicks, these changes could drive up CPCs as well.
For agencies and internal marketing teams, it's critical to proactively communicate the context of these changes to stakeholders, so that declining CTRs and rising CPCs are understood in context rather than treated as performance failures.
Not all search intent is affected equally by AI. AIOs are showing up predominantly for the upper-funnel, research-driven queries that users rely on to learn, compare, and evaluate before making a final decision. In fact, 99.2% of the keywords that trigger AIOs are informational in intent.
This means that it has become more difficult for paid search to deliver the upper-funnel discoverability and efficient clicks it is known for. There are also emerging implications for programmatic, as fewer impressions become available from key publishers whose organic traffic is being absorbed by AI-powered search experiences.
Action- and decision-oriented queries, however, remain largely unaffected—which presents a clear opportunity for search advertisers. Lower-funnel, intent-driven keywords should be prioritized accordingly.
Perhaps the most important mindset shift for search advertisers right now is reframing the value paid search provides. As AI search increasingly resolves questions without site visits, paid media will drive fewer clicks. But that doesn’t necessarily mean those investments are driving less value.
Clicks have long been advertisers' primary focus because they’re measurable, but paid search has always contributed to outcomes beyond that immediate action. Paid search-driven brand exposure drives recall and brand trust, influences later decisions and return visits, and impacts whether a brand makes it into a consumer’s consideration set at all.
Of course, measuring the impact of paid search in this way is more complex than traditional paid search attribution. As the causality between paid search exposure and action becomes harder to track, teams will need to lean more heavily on marketing mix modeling and multi-touch attribution to connect paid media investment to business outcomes.
AI’s impact on paid media performance is already significant: Attention is more compressed, different intents are leading to different outcomes, and the click-based model of demonstrating paid media value is under pressure.
Advertisers who understand these dynamics and adjust their strategies, benchmarks, and measurement approaches accordingly will be far better positioned to drive results from paid search investments as the search landscape continues to evolve.
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Looking for more insights on the future of search engine marketing? Explore everything marketers need to know about the shifting landscape by watching our recent webinar: Is Search Totally F**ked? What Do We Do Now?.
In this episode, former Discover media and audience strategy leader Clare Liston joins host Noor Naseer to break down how top marketers actually evaluate adtech and martech partners.
From avoiding “shiny object” syndrome to pressure-testing vendors with direct questions, Clare shares a practical framework for choosing tech that drives real business outcomes. She unpacks why most adoption is reactive, how to think about ROI within working media, why human credibility matters more than jargon, and more.
In this episode of Adtech Unfiltered, Malorie Benjamin, Chief Transformation Officer at Dixon Schwabl + Company, joins host Noor Naseer to unpack how the agency pitch process is evolving.
She shares how data, AI, and predictive modeling are reshaping the way agencies approach new business, why many clients are still stuck on last-click attribution, and how transparency can build trust in programmatic buying. Malorie also explores the growing pressure on CMOs to adopt AI, how agencies can simplify complex tech for clients, and what truly sets agency pitches apart today. The discussion offers a candid look at what it takes to win modern agency pitches.
Humans are wired to search.
With billions of search queries per day, marketers have long known where and how to find their audiences. Now with the rise of generative engines and AI, the search landscape is facing its biggest upheaval in decades. Traditional search, long the backbone of digital strategy, is being rapidly replaced and reshaped by generative engine optimization (GEO), fragmented user journeys, and new discovery ecosystems.
In this webinar, Robert Kurtz, Basis’ Strategic Business Outcomes Partner, joins host Noor Naseer, VP of Media Innovations + Technology, to discuss the past, present, and future of search. They highlight immediate threats to legacy search approaches and inspire strategies for brands, marketers, and advertisers to reclaim visibility and influence.
Key Takeaways:
After years of uncertainty, TikTok's sale to a group of US investors has finally given TikTok advertisers something they haven't had in a while: stability.
For years, regulatory volatility kept many advertisers from making long-term commitments on the platform. After all, why build a strategy around an app that might eventually cease to exist in the US? Now that the threat of a ban is off the table and the sale is finalized, advertisers can plan with more confidence than they’ve had in years.
Still, this new era of TikTok comes with unanswered questions that advertisers would do well to keep tabs on. Potential changes to the app’s famed algorithm, new privacy concerns, the evolution of TikTok commerce, and the development of AI-led advertising features stand out as the most important areas to watch in the coming months.
TikTok's algorithm is, in many ways, the true heart of TikTok itself. It's what fueled the app's rise to prominence and what keeps users so deeply engaged (see: “I built this algorithm brick by brick”). As such, whether the algorithm will change under new ownership has become one of the biggest questions for users and advertisers alike.
The good news? The owners are incentivized to keep things as similar as possible to not rock the boat with users and advertisers. Still, even subtle changes could alter the user experience in meaningful ways—and some algorithm changes are essentially baked into the deal itself. The app’s new owners (a group called TikTok USDS Joint Venture LLC) have licensed the algorithm to Oracle, and stated that they will “retrain, test, and update the content recommendation algorithm on US user data.”
Major content changes seem unlikely in the short term, but significant questions remain as to how this group of investors will influence what people see in their TikTok feeds. This concern isn’t lost on users: Shortly after the sale, many reported signs of content suppression on the app. Perception matters too: Whether changes are happening or not, if users feel like their feeds are shifting, that could affect usership and engagement. User sentiment is already in flux, with one recent survey finding that one-third of Gen Z users now feel they must actively train their TikTok algorithms because they’re not as personalized as they once were.
Considering this, advertisers should monitor TikTok usership and engagement over the coming months to stay abreast of any changes that may occur as a result of the algorithm’s evolution.
Algorithm uncertainty isn’t the only perception risk advertisers should track. TikTok’s new privacy policy presents another layer for advertisers to consider. The app is now collecting more user data, which has garnered privacy concerns from both users and human rights experts. Even Gen Z—the generation that drove TikTok's rise—is taking notice: 64% of Gen Z TikTok users say the sale made them more aware of their data.
This presents a potential risk for advertisers, as these privacy concerns could impact usership and engagement. As with the algorithm, the key for advertisers is to keep a close eye on how these concerns play out in the numbers.
How the commerce side of TikTok will develop under new ownership is another open question worth watching. Oracle—now a key player in TikTok's new ownership structure—has deep roots in retail commerce and supply chain management, which could have notable implications for TikTok Shop. If Oracle further integrates TikTok with new commerce solutions or introduces an Oracle commerce solution for the app, that could be a significant selling point for advertisers looking for closed-loop measurement on retail and commerce campaigns.
The flip side, though, is balance. If the platform leans too heavily into commerce at the expense of entertainment content, the user experience could suffer. Already, 79% of Gen Z TikTok users miss the early days of the app, before the surge in brand partnerships and the launch of TikTok Shop. Advertisers should monitor how that balance plays out, and whether engagement holds steady as the commerce side of the app continues to evolve.
Oracle's involvement also raises questions about where TikTok's AI-driven advertising capabilities are headed. Meta has set a high bar with campaigns that leverage AI for campaign builds, optimization, and audience targeting. Before the sale, TikTok was just scratching the surface in this area. With Oracle now in the mix, it's reasonable to expect TikTok's AI-led advertising offerings to accelerate.
If that is how things play out, creative is going to be an even bigger lever on TikTok. With AI taking on more of the campaign building and optimization work, the brands investing in UGC, influencer content, and platform-native creative will have a meaningful edge. Those that aren't will find it increasingly difficult to perform.
Overall, while there are some big question marks in the TikTok advertising space post-sale, the outlook is mostly positive. The app’s future is stable, advertising performance appears to have remained consistent, and TikTok continues to be cost-efficient relative to other social platforms, with strong conversions and CPA.
That said, the advertisers who keep a close eye on the questions outlined above—around the algorithm, privacy, commerce, and AI-led advertising—will be best positioned to navigate the platform successfully as this new chapter continues to unfold.
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AI is poised to transform more than just TikTok advertising. To see how marketing teams at leading brands and agencies are already putting it to work (and where the challenges still lie), check out AI and the Future of Marketing.
Key Takeaways:
You need to get started using programmatic buying tools, but you’ve never done it before, and you don’t know where to begin. Join the club. We get it. It’s the same reason we haven’t learned to cook for ourselves yet.
Here’s the good news: We’ve got experts at Basis who know the ins and outs of programmatic advertising. All you have to do is ask the right questions. Lucky for you, we’ve asked the basic questions and we’ve come equipped with answers—and, lucky for us, we've been assured repeatedly that there is no such thing as a dumb question.
To start: Programmatic is a very broad term. Simply put, it’s technology that automates digital media buying. This can include automating anything from rate negotiation and campaign set up to optimizations and actualizations. One of the primary buying tools you have at your disposal is a DSP.
A demand-side platform (DSP) is an automated ad-buying platform that advertisers and agencies use to purchase digital ad inventory, such as banner ads, mobile ads, and in-stream video, across many websites and apps at once. DSPs are integrated into multiple ad exchanges.
Popular examples of DSPs include The Trade Desk, Google DV360, Amazon DSP, and Basis DSP.
A DSP works by using real-time bidding (RTB) to buy ad impressions automatically, evaluating and bidding on each impression in the milliseconds before a page loads. Here’s the process step by step:
An SSP is not the same thing as a DSP, but it is similar in concept.
Supply-side platforms, or sell-side platforms (SSPs), facilitate the sale of publisher inventory through an ad exchange. SSPs offer services such as minimum bid requirements in order for the publisher to maximize how much their ad space sells for. The difference is that DSPs are for marketers and SSPs are for publishers. SSPs, like DSPs, are plugged into multiple ad exchanges.
An ad exchange is a digital marketplace where advertisers and publishers buy and sell ad space through real-time bidding (RTB). Think of the ad exchange as the "go-between" in the automated buying world. An ad exchange is a digital marketplace that enables advertisers and publishers to buy and sell advertising space via real-time bidding (RTB). Real-time bidding (RTB) is the process of buying and selling ad impressions through instantaneous auctions that occur in milliseconds. The ad exchange announces each impression—with the inventory flowing through DSPs and SSPs—in real time and asks buyers if they are interested in buying said impression and at which price
| Platform | Definition | Who Uses It |
|---|---|---|
| DSP (Demand-Side Platform) | Automated platform for buying digital ad inventory | Advertisers and agencies |
| SSP (Supply-Side Platform) | Platform that helps publishers sell their ad inventory | Publishers |
| Ad Exchange | Digital marketplace where DSPs and SSPs connect to buy and sell ads via real-time bidding | Both buyers and sellers |
In order to understand why DSPs matter, it's important to remember where the need came from and how the ad industry operated before automated buying. Historically, if you were a media buyer at an ad agency, the buying process was facilitated through human beings—it was you (the advertisers), the publishers (website where ad will appear), an audience (the viewer of the ad), and a bunch of spreadsheets and emails going back and forth negotiating prices. This process was complicated, time-consuming, and often error-prone. DSPs allow advertisers and agencies to buy across a lot of sites at the same time—and all of this is done instantly and efficiently, usually before the webpage loads.
There are many DSPs in the programmatic world to choose from. Choosing the right DSP for you depends on a number of factors.
DSP Evaluation Checklist:
What does DSP stand for?
DSP stands for demand-side platform, software that lets advertisers and agencies buy digital ad inventory automatically through real-time bidding.
What is the difference between a DSP and an SSP?
A DSP is used by advertisers to buy ad inventory, while an SSP is used by publishers to sell it. Both connect through an ad exchange.
What are examples of DSPs?
Widely used DSPs include The Trade Desk, Google DV360, Amazon DSP, and Basis DSP.
What if I sign up for a Demand Side Platform and find out I have no idea what I’m doing?
Some DSPs come with a full team of experts, offering you everything from full-service to self-service and everything in between. With Basis DSP, for example, you'll start with a platform training program, offering you an overview of programmatic, a walk-through of the interface, and best practices for campaign creation and optimization. Ongoing support is available in the form of a customer success manager and resources to keep you informed—like new feature webinars, best practice guides, and industry-leading research reports.