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Google's third core update of 2025 devastated Discover traffic for news publishers during peak holiday season, while OpenAI signals advertising ambitions and major ad tech consolidation reshapes the competitive landscape.
The digital advertising industry closed 2025 with seismic shifts across search, programmatic, and AI-powered platforms. Google unleashed its third core algorithm update on December 11, triggering severe ranking volatility and Discover traffic collapse that left publishers scrambling during the most lucrative quarter of the year. The timing proved particularly harsh. Seasonal advertising rates typically peak in December, yet hundreds of website operators faced their worst traffic periods in years, with some reporting 70-85% declines in daily visitor counts.
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Meanwhile, OpenAI moved closer to monetizing ChatGPT through advertising, with internal discussions centering on sponsored content that could appear directly within AI responses. The development signals a fundamental shift in how AI platforms might generate revenue—and raises questions about the boundary between organic answers and paid placement. The week also brought news of media buyers pulling spend from The Trade Desk’s OpenPath product over transparency concerns, underscoring persistent tension between programmatic efficiency and fee clarity in the supply chain.
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The December 2025 core update announcement arrived via the Google Search Status Dashboard on December 11 at 9:25 AM Pacific Time. Google described it as a “regular update designed to better surface relevant, satisfying content for searchers from all types of sites,” with a projected three-week rollout extending through January 1, 2026. This marked the third confirmed core algorithm modification of 2025, following March and June updates earlier in the year.
Industry tracking tools detected significant impact almost immediately. According to Search Engine Roundtable, the most noticeable volatility occurred on Saturday, December 13, though signs of movement appeared as early as December 12. SISTRIX’s Update Radar measured a volatility index of 3.54 on the announcement date, indicating “increased SERP fluctuation” though not reaching the 6.0 threshold typical of major confirmed updates.
The Discover traffic impact proved catastrophic for many publishers. One operator reported a 98% drop in Discover impressions in the days leading to the announcement. “Mine hasn’t completely disappeared yet, but it dropped by 98% in the days leading up to this update being announced,” according to comments documented by Barry Schwartz on Search Engine Roundtable. Research published in August 2025 found that Google Discover had become the dominant traffic source for news and media websites, accounting for two-thirds of Google referrals. This concentration made the December decline particularly devastating.
A second wave of volatility struck on December 20, suggesting the rollout continued intensifying through the holiday period. Glenn Gabe, a prominent algorithm analyst, documented significant movement across thousands of previously impacted sites, with some seeing reversals while others experienced accelerated losses. The pattern matched typical core update behavior—initial impact followed by adjustments and recalibrations over the three-week window.
The timing created particular challenges for seasonal revenue. December typically represents peak advertising spending, with higher CPMs and more engaged audiences. Publishers depending on this revenue faced simultaneous traffic collapse and missed monetization opportunities. SEO forums filled with reports of sites seeing ranking improvements for well-optimized pages while older content dropped, creating complex performance patterns that defied simple interpretation.
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OpenAI’s approach to ChatGPT monetization took clearer shape this week with reports that the company is actively developing advertising formats. According to Search Engine Roundtable’s coverage of a report from The Information, OpenAI’s AI models could prioritize sponsored content to ensure it appears in ChatGPT responses. The company has reportedly been reviewing mockups showing sponsored information in sidebars alongside the main response window.
The discussions represent a significant departure from OpenAI’s subscription-focused revenue model. Employees have apparently considered multiple approaches: sponsored information receiving preferential treatment in responses, disclosure labels indicating sponsored results, and advertisements appearing only after conversations progress in specific directions. One mockup reportedly showed display ads as a secondary step once users expressed interest in additional information—a form of intent-based targeting unique to conversational AI.
This development arrives as Google simultaneously expands its own AI advertising infrastructure. The company quietly rolled out ads in AI Overviews to 11 additional countries on December 19, extending beyond the United States to Australia, Canada, India, Indonesia, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, Philippines, and Singapore. The expansion occurred through documentation updates rather than formal announcements—advertisers discovered the change through modifications to Google’s help page titled “About ads and AI Overviews.”
Text and Shopping ads from existing Search, Shopping, and Performance Max campaigns now qualify for placement within or adjacent to AI-generated responses across these markets. Google has excluded sensitive verticals including finance, healthcare, gambling, alcohol, adult content, and politics from AI Overview advertising. Adthena documented just 13 ad instances across 25,000 monitored search results pages in late November, suggesting Google maintains cautious rollout policies despite technical capability for broader deployment.
The industry’s largest independent demand-side platform encountered growing buyer resistance over its OpenPath product, with several major media agencies pulling or pausing investment due to transparency concerns about indirect costs. Launched in 2022 as a direct connection between advertisers and publishers, OpenPath was pitched as a cleaner programmatic pipeline that would minimize waste for advertisers while maximizing revenue for publishers.
Publishers using OpenPath pay a fee to The Trade Desk based on a percentage of advertiser spend, typically around 5%. This structure created problems for media agencies hired to get clients the best possible price on advertising inventory. The prices they see could be affected by publishers raising floor prices, demand from other advertisers, or inclusive of The Trade Desk’s take rate—with no clear visibility into which factors apply.
One indie agency buyer told Digiday they had sworn off OpenPath usage after testing it earlier this year because of the lack of cost clarity. Another executive at a large agency holding company said their firm stopped spending through OpenPath altogether since autumn. “As an organization, we have significantly deprioritized OpenPath as a supply path,” they stated. The issue is not cost itself—their own estimates suggested OpenPath’s indirect cost was competitive relative to SSP peers. Rather, agencies could not look clients in the eyes and explain with total confidence how much they were paying.
This tension reflects broader 2025 ad tech dynamics documented by AdExchanger. Amazon’s DSP gained significant share throughout the year, putting pressure on The Trade Desk and other independent platforms. The company found itself responding to buyer pressure on pricing and flexibility, eventually loosening its historically firm pricing stance. A programmatic lead described seeing The Trade Desk willing to negotiate rates for the first time after years of having the same rates—a strategic recalibration driven by Amazon’s aggressive fee structures.
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The advertising industry witnessed its largest deal in history with Omnicom’s $13.5 billion acquisition of former rival Interpublic Group, finalized in late November. The mega-merger cemented 2025 as a banner year for advertising, media, and marketing dealmaking. “Omnicom and IPG is the most important deal of the year in the industry,” observed Michael Kassan. “The industrial logic there is clear. As we get to the next level of technology, the combination and the size that they’ve been able to achieve is going to give an advantage.”
Beyond the Omnicom-IPG combination, deal activity accelerated across multiple segments. T-Mobile acquired digital out-of-home platform Vistar Media in January, followed by location data platform Blis less than two months later. The Trade Desk purchased Sincera to bolster its DSP with deeper supply-path and ad-quality insights. PE firm Novacap took Integral Ad Science private for $1.9 billion in a deal that closed in December.
Strategic acquisitions shaped specific verticals. Instacart acquired Wynshop, a startup providing online storefronts to grocers. Roku purchased subscription streaming service Frndly TV for $185 million. Verve Group acquired search intelligence platform Captify. The activity suggests ad tech consolidation continues despite economic uncertainty, with buyers seeking specific capabilities rather than broad expansion.
Digiday’s year-end analysis characterized 2025 as Big Tech’s victory—even when facing setbacks. Google quietly recalibrated, retreating from some long-running bets while accelerating in others. The most visible reversal came with the effective end of the Privacy Sandbox experiment and Google’s decision to walk back plans to fully deprecate third-party cookies in Chrome. Meanwhile, Gemini emerged as connective tissue across Google’s ad stack, touching everything from creative generation to bidding and optimization.
Google announced through Anish Kotthapalli, Community Manager for the Gemini Apps Team, that the complete replacement of Google Assistant with Gemini on mobile devices would extend beyond the previously announced end-of-2025 deadline. The December 20 forum post stated the company was “adjusting our previously announced timeline to make sure we deliver a seamless transition.”
The delay affects Android phones, tablets, headphones, watches, and automotive implementations—excluding smart home devices which completed their Gemini transition on October 1. Google had reported that the Gemini app achieved 650 million monthly active users in October 2025, climbing from 450 million in July 2025. Much of this growth occurred through forced integration rather than organic adoption, as Google began automatically routing Assistant queries to Gemini on devices where users installed both services.
This timeline extension arrives amid broader questions about Gemini’s monetization strategy. Google representatives reportedly told advertising clients during December 2025 calls that the company planned to bring advertisements to the Gemini chatbot in 2026, though VP Dan Taylor publicly disputed these claims. The transition from Assistant to Gemini involves fundamental shifts in data processing, privacy implications, and user control over device functionality—complications that may have contributed to the extended timeline.
Separately, Google’s Gemini AI assistant began integrating Maps data with photos and ratings directly in conversational interfaces starting December 13. The feature enables users to see local search results in rich visual format by pulling data from Google Maps, with photos, ratings, and location information displayed without requiring separate navigation to Maps applications.
Google’s parent company announced a definitive agreement to acquire Intersect for $4.75 billion in cash plus assumption of debt on December 22. The acquisition brings multiple gigawatts of energy and data center projects to Alphabet as technology companies struggle to secure sufficient power for artificial intelligence infrastructure. Closing is anticipated in the first half of 2026 pending regulatory approvals.
Intersect operates energy and data center projects across multiple U.S. states. The deal excludes Intersect’s existing operating assets in Texas and its operating and in-development assets in California, which will continue as an independent company. Intersect will operate separately under its own brand, led by founder and CEO Sheldon Kimber. Google already owned a minority stake from a previously announced funding round.
The acquisition addresses mounting energy challenges facing technology companies as AI and data center operations drive unprecedented electricity demand. This follows Google’s August 2025 nuclear deal with Kairos Power and TVA for advanced reactors, part of a broader infrastructure push. Meta announced “hundreds of billions” in AI infrastructure investments including gigawatt-scale data centers in July 2025, intensifying competition for power resources across the industry.
Meta introduced two substantial updates to its Ads Library interface on December 22, expanding competitive intelligence capabilities for advertisers. Digital marketing specialist Bram Van der Hallen documented the changes: advertisers can now filter advertisements by WhatsApp platform, and a new low impression count indicator identifies ads generating fewer than 100 impressions.
The WhatsApp filter enables identification of competitors maintaining active campaigns on the messaging platform, following Meta’s recent addition of Threads as a filterable option. The low impression label distinguishes between newly launched campaigns and underperforming advertisements during research workflows. The indicator appeared 19 hours after an example advertisement’s launch in Van der Hallen’s documentation.
These transparency enhancements provide advertisers with more granular competitive intelligence as Meta expands monetization across additional platforms. The updates apply globally within Meta’s Ads Library interface, affecting research capabilities for advertisements running across the full family of applications including Facebook, Instagram, Messenger, Audience Network, WhatsApp, and Threads.
2025 marked a turning point for TV advertising as streaming viewership surpassed linear for the first time and sports rights migrated to streamers. Ad-supported viewing outpaced ad-free viewing, while AI began personalizing full-funnel consumer journeys across platforms. Disney’s programmatic sales increased 30% from 2024, with 70% of biddable deals now tied to upfront commitments.
Netflix continued its advertising expansion. The company debuted Netflix Ad Suite (NAS) with VP Nicolle Pangis in March, and President of Advertising Amy Reinhard told advertisers that 2025 would be the company’s “biggest year ever” during upfront presentations. Company leadership consistently highlighted growing ad revenue in quarterly earnings reports throughout the year.
Nielsen and Roku announced expansion of their strategic partnership on December 22, incorporating Roku’s viewing data into Nielsen’s advanced campaign measurement and outcome solutions while granting Roku access to Nielsen’s Streaming Platform Ratings. According to Nielsen data from October 2025, streaming on Roku devices alone represents more than 21% of all TV viewing. The Roku Channel ranks second in ad-supported TV time.
IAB Tech Lab published standardized guidelines for six connected television ad formats on December 11, opening public comment through January 31, 2026. The CTV Ad Portfolio establishes technical specifications for pause ads, menu ads, squeezeback formats, overlay ads, in-scene insertions, and screensaver ads—formats existing outside traditional commercial breaks that proliferated across streaming platforms without consistent implementation standards. CTV advertising spending approached $33.35 billion in 2025.
Recipe creators escalated their fight against Google’s artificial intelligence features on December 21, when Inspired Taste founders Adam and Joanne Gallagher appeared on NBC News to warn consumers about “Frankenstein recipes” generated by AI systems. The nationally televised interview followed months of complaints from food publishers reporting that Google displays plagiarized recipes containing dangerous errors while using their brand names and photographs without permission.
“Google needs to stop using our brand name to try to trick users into trusting them,” Adam Gallagher wrote after the broadcast. The couple operates Inspired Taste, a recipe blog running for over 15 years. They now compete against AI-generated variants of their recipes appearing prominently in Google search results. The NBC News segment demonstrated how AI-generated holiday recipes produce unusable food.
Industry professionals Barry Schwartz and Lily Ray publicly supported the effort. This pattern extends beyond recipes—Google’s AI Overviews faced documented spam problems as manipulators gamed the system to promote their content. Lily Ray documented in May 2025 how companies create listicles claiming to be “the best” in categories, then watch as AI Overviews cite these self-promotional articles as authoritative sources.
Microsoft Advertising’s Navah Hopkins clarified that exact match keywords receive priority even over Ad Rank in the company’s advertising auctions. Hopkins stated on social media: “Exact match will get the priority if it’s there, otherwise Ad Rank determines everything.” The clarification fundamentally changes how advertisers understand competition against Performance Max campaigns and other broad-matching systems.
This confirmation arrived as Google continued testing various advertising enhancements. The company is experimenting with “learn more” links appended to search ads text, adding blue anchor underlined text after normal ad descriptions. Google Ads Advisor suggestions now appear within reporting sections, pushing advertisers toward AI-powered optimization recommendations. The Ads Liaison identified PMax channel performance reporting as her top feature release for Google Ads in 2025.
YouTube integrated Nano Banana, Google’s Gemini 2.5 Flash image editing model, into its Posts feature on December 17. The capability enables creators aged 18 and older in Canada, the United States, India, and New Zealand to add, remove, or modify image elements through text prompts. Commands must currently be written in English, with plans to expand to additional markets.
Image generation volume across Google’s Nano Banana implementations reached 5 billion within approximately two months of the initial Gemini app launch in August 2025. YouTube CEO Neal Mohan told Time Magazine in December that AI capabilities improve “literally every week” and help the platform “detect and enforce on violative content better, more precise, able to cope with scale.”
Snapchat announced Animate It on December 22, introducing its first open-prompt video generation lens. The feature allows Lens+ subscribers to create short videos from text prompts using Snapchat’s internally developed AI video generation model. Users access the feature by searching from the camera interface, then entering custom prompts or choosing from suggested options. AR lens engagement reached 80 billion monthly interactions between April and December 2024 in India alone.
Google also introduced video verification tools within the Gemini app on December 18, enabling users to detect content created or edited with Google AI. The verification process relies on SynthID watermarking technology, which Google describes as “imperceptible” and embedded across both audio and visual tracks of AI-generated content.
Digiday’s year-end analysis highlighted how 2025 forced publishers to confront AI as daily reality rather than future concern. Generative AI wove into traffic analyses, licensing negotiations, and product development. Clicks from search waned as AI answers increasingly replaced blue links. Some companies struck licensing deals—Microsoft launched its pay-per-usage AI content marketplace in July, signing People Inc. and USA Today Co. Amazon signed deals with Condé Nast and Hearst for its AI shopping assistant Rufus.
The Really Simple Licensing (RSL) Collective launched in September with over 50 publishers joining its framework designed to standardize how publishers tell AI systems what content they can use and how they must pay. Members include People Inc., Ziff Davis, Yahoo, Arena Group, BuzzFeed, USA Today Co., and Vox Media. Meanwhile, lawsuits continued—The New York Times and the Chicago Tribune sued tech companies over content usage in December.
Publishers also turned to vertical video to chase audiences consuming information in that format. Outlets including Time, CNN, and The New York Times added more vertical video to their sites and apps, positioning it as an audience play and video advertising growth driver. The format is more difficult for AI to replicate compared to text, providing additional strategic value.
Brands navigated tariff-driven uncertainty throughout 2025, with the Trump administration’s trade policies creating significant marketing disruption. Some clients moved production from China to countries with smaller tariffs like Brazil and Mexico, while two apparel clients stopped advertising altogether. Others absorbed rising costs without altering advertising plans.
WPP upgraded its 2025 ad revenue growth projections from 7.7% to 8.8%, though businesses large and small devoted substantial resources navigating the shifting landscape. At full-service agency Moroch, one or two “very conservative” clients are expected to cut media spend by 5-10% in 2026. Major sporting events including the World Cup and Winter Olympics offer potential uplift of approximately 2% in overall media spending.
November retail sales rose 4.53% year-over-year, according to the CNBC/NRF Retail Monitor data released December 12. The reading captured the first half of the holiday shopping season, with Cyber Monday falling on December 1 due to a late Thanksgiving. Black Friday occurred November 28. NRF had projected consumers would spend $890.49 per person on holiday items, the second-highest amount on record.
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Earlier December 2025 Coverage:
Year-End Coverage: