2025 Media Industry Movers

The Connected Consumer and the Return of Performance Marketing

One of the first chances for leaders in the media industry to gather, share their views on and in fact, shape, the leading trends in media for 2025 is at CES in Las Vegas. Yes, generative AI and live sports got their fair share of airtime, but much of the conversation centered around retail media, the connected consumer and the return to performance marketing.

Based on Alexander Group client work in media throughout 2024 and how those companies evolved, and continue to evolve their go-to-market models, the ‘winners’ in 2025 will be a handful of large, fully scaled, companies in retail media (and AdTech). The rest may be chasing the consumer without a way to monetize or benefit from scale – and as the 2024 theme of profitability, not just ‘eyeballs,’ has shown – that won’t be good enough. There’s quite a difference between Amazon creating its own retail media network and a regional retailer with a valuable, but niche consumer base doing so. This is Alexander Group’s primary theme, or prediction. And it aligns well with much of what the media team heard at CES.

The secondary theme centers around a few industry trends that will certainly continue to shape media throughout 2025, but their impact will be more long term. Let’s take a look at three of those first before turning to retail media, as all three are intertwined, and in a sense enable the success and rise of retail media.

Streaming Consolidation is Coming

The demand for on-demand content will continue to remain strong throughout 2025. The competition among the many (too many!) streaming platforms will remain intense. For the consumer, that should promise more high-quality content. Top streamers like Netflix, Amazon and Disney will continue to invest heavily in pumping out original content. New tech, like 5G, will further enable high-definition content. This will disproportionally benefit live sports, e-sports and events. Though there are still bumps in the road – exhibit A: latency issues with the Netflix-aired Paul vs. Tyson fight.

The anticipated reduction in regulatory scrutiny under the new administration should lead to a big increase in merger and acquisition activity. The activity has been predicted for the last several years but has not yet come to fruition. A key driver for the M&A activity could be ‘the other side of the coin’ as it relates to the content – there’s too much of it, and besides the flagship, original content, much of it is mediocre. That is, the streamers are ripe for consolidation.

Generative AI: From Talk to Traction

In 2025 we’ll see more, better and personalized AI content. Which will lead to stronger and longer engagement with that content. Data – good, first-party data – will be the backbone that content. That’s one of the primary reasons we’re calling out retail media and AdTech as likely winners in the space.

Early forays into AI-generate content – particularly journalism, news, etc. – were met with resounding criticism. It led to significant erosion of trust in the content, and in turn in ad placement around that content. Automated journalism, even if only in the form of ‘fact-checkable’ bulletins, or updates, will be back in full force in 2025. Meta’s recent announcement about eliminating content moderators, and leaving the work to algorithms and user groups, should ‘help that along.’

Simultaneously, companies will likely be less transparent about the use of AI in their content. Most likely, the top brands will remain cautious. The others, in an effort to shore up subscribers or curtail production costs, will increase their use of generative AI. As AI gets better, we’ll be less likely to notice the difference, and possibly, less likely to care.

Live is King

Live sports (increasingly) and news (decreasingly) remain bright spots for media. The sector strength has led to streamers getting into live sports over the last 24 months. The Olympics showcased the multi-channel way that consumers expect to consume and experience live events – on-demand and linear, with curated, differentiated and niche storylines woven throughout. As the experiences become ‘stronger’ and more elaborate, the benefit of ‘live’ will be realized by a smaller pool of winners – like Amazon – that can seamlessly blend first-party data, via its own retail media networks (RMNs), and channel the connected consumer to make purchasing decisions.

Alexander Group heard at CES that as much as 90% of live sports/viewers are simultaneously on a mobile device, which opens the door for companies with RMNs to capitalize. In fact, the top streamers are betting big on all three of the top themes for 2025 mentioned above – streaming consolidation, AI and live – to catapult them ahead of the rest of their peers in the media landscape.

Retail (Media) on the Rise

Retail media’s rise since early 2020 is due to booming e-commerce and AdTech innovation. Growth in retail media takes many forms: retail media search vs. traditional search; in store ad spend; non-endemic partnerships. The latter does carry the risk of brand confusion or a poor customer experience (e.g., NBCUniversal + Walmart; Instacart + The Trade Desk;). Over the last several years we’ve seen ad executives from ‘traditional’ media companies take the help at legacy, or traditional brick-and-mortar retailers – Walmart, Target, Best Buy, etc. Their move is a deliberate reaction to growing opportunities in this space – vast customer data, coupled with AI, AR and the like, leads to targeted advertising, and ultimately, superior performance.

The concentration of power at these large, scaled and few companies will pose some challenges. Privacy concerns and regulation aren’t going away. Companies will need to have flexibility to address those concerns in areas where they are high (e.g., Europe).

Final Thoughts on Media Trends in 2025

The confluence of the top three media trends will lay the groundwork for a continued rise in retail media, and Alexander Group believes that the ‘winners’ in 2025 will be a handful of large, fully scaled companies. Whether that will prove beneficial in the interest of consumers is up for grabs.