Looking Ahead to 2025

The advertising and marketing industry stands at a pivotal juncture of innovation and responsibility. Last year, we witnessed unprecedented advancements in creative technologies, reshaping how we create, produce and deliver campaigns. Generative AI, initially a novelty, has become an indispensable tool, augmenting human ingenuity and creativity in new and exciting ways. This year, amidst perpetual change and opportunity, we see tremendous enthusiasm and exploration as our industry discovers the possibilities of what's next.

We look forward to continuing the work with the ANA addressing Agency Search Simplification following the launch of the industry's new RFI Template to provide consistency and streamline work in addition to a focus on the meaning of value in an agency/client partnership and the impact of long-term relationships. We will continue to advocate on your behalf and follow legislation impacting our industry at the state and federal level including implications of tax deductibility, AI regulation, data privacy and labor issues. Talent remains at the forefront for every agency leader and we will continue to create new training and development programs to support evolving skills required to succeed. As the industry embraces perpetual change in the media, technology and data space with creator content, retail networks and responsibility, we'll address measurement initiatives as well as evolving data privacy implications.

I'm thrilled to share that we recently launched an entirely new 4As website experience to better support members, partners and industry collaborators. We know that time and attention are precious commodities and we want to ensure that the 4As delivers a seamless experience allowing users to navigate and find the content needed to support evolving business demands. Please explore and share feedback with us as we continue to refine and optimize the experience.

In 2025, our goal remains the same: to empower the success of our members and help move the industry forward. This work keeps everyone at the 4As energized and committed to a better future for all. And the only way we can deliver on our mission is to continue to bring the power of the community together to drive change and maintain momentum in our dynamic industry. Here's to a year filled with prosperity and emerging opportunities for all.

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Marla Kaplowitz
CEO

Pre-Emptive AI Regulation Picks Up Speed

AI regulation will likely follow a similar path to privacy regulation but at a faster pace, with a sectoral approach and California setting the standard, while copyright and AI issues will likely remain unsettled.

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Recent Developments

  • After a slow start, AI regulation has picked up speed with several states passing new laws covering AI in 2024, as well as Congress considering a lot of new legislation.
  • The U.S. Copyright Office has begun a multi-year process examining new issues presented by AI, and will be issuing a series of reports with legislative recommendations for Congress.
  • Unlike more typical consumer protectionist regulation, a lot of the regulation proposed around AI hasn’t specifically focused on harms created by AI, but has instead indicated the mere use of AI creates potential harm.


Trends and Forecast

  • Regulation
    • It’s likely that AI regulation will likely follow a similar path as privacy regulation, the only difference being regulators will move faster on AI than they did on privacy.
    • Unlike the EU that has already passed a comprehensive law regulating AI, the U.S. is more likely to take a much more sectoral approach (i.e., looking at AI issues by industry or perceived harm), both on the federal and state level.
    • As in the past, California is likely to be the state that sets the standard for a lot of AI regulation.
    • In 2024, sixteen states passed laws requiring disclosure of AI use in political advertising.
  • Copyright and AI will likely present unsettled issues well into the immediate future. The U.S. Copyright Office has almost sole jurisdiction over copyright in the U.S., and they don’t typically move quickly.
  • In July 2024, the U.S. Copyright Office released its first report on AI and copyright issues, specifically looking at the issue of Digital Replicas.
  • The issues of transparency, disclosure and watermarking in AI are definitionally different, but they’re getting interwoven into a lot of proposed regulation in sometimes confusing ways.
  • A lot of the more immediate issues around AI usage for agencies are going to be resolved via the judicial process, and for that reason it’s worth keeping an eye out for some of the big cases involving AI, especially cases involving AI and copyright.
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Patchwork of Privacy Regulation Grows

In the absence of comprehensive privacy legislation passed by Congress, there is an growing patchwork of state laws that are diverging from each other and expanding in scope, with a potential merging of AI and privacy legislation on the horizon.


Recent Developments

  • Despite another comprehensive privacy bill being introduced and gaining traction in 2024, Congress still did not pass comprehensive privacy legislation in 2024.
  • The states continue to fill the void. There are now 20 different comprehensive state privacy bills, and more are expected in 2025. New state privacy bills are starting to significantly expand the definition of sensitive data, requiring more data categories to be opt-in.
  • States are starting to go further into specifically regulating healthcare privacy, either as an addendum to their existing comprehensive privacy legislation or as new standalone legislation.


Trends and Forecast

  • Given Congress’s unwillingness to move comprehensive privacy legislation forward, agencies should expect to continue to see a growing patchwork of state-by-state legislation.
  • Recent state comprehensive privacy legislation is starting to diverge from the first state comprehensive privacy bill, the California Consumer Privacy Act (CCPA). It’s no longer true that being in compliance with California privacy law means a company is in compliance with all state comprehensive privacy laws.
  • Given that the passage of state privacy legislation has proven to be a relatively non-partisan issue, 2025 will likely continue to see the acceleration of adoption of new state comprehensive privacy laws. These new laws will likely continue to diverge in significant ways from California’s original comprehensive privacy law.
  • It’s likely that in 2025 legislation around AI and privacy will start to merge in several areas, i.e. AI state legislation will incorporate existing state privacy laws by reference or will even develop new legislation to consider privacy in the context of AI.
  • In Congress, it will likely still be an uphill battle to pass any comprehensive privacy legislation. While Congress got very close to passing children’s privacy legislation in late 2024, they still were not able to get it over the line due to continued resistance over First Amendment issues amongst others.

State Privacy Laws Landscape 2024

A map of the US showing the current privacy law status of each state

Preserving Advertising Deductibility

With tax reform and budget changes on the horizon and a growing federal deficit, advertising tax deductibility is likely to come under scrutiny yet again. The 4As and its allies remain committed to advocating and working on behalf of our members to ensure advertisers are able to deduct the full cost of advertising as a necessary business expense in the year of spend.

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Recent Developments

  • With over 30 provisions of the 2017 Trump Administration tax cuts expiring in 2025, and a growing federal deficit of over $36 trillion, 2025 will be a big year for budget changes in Congress.
  • In 2017, the advertising industry was threatened with changes to the advertising deduction. At that time, Congress was proposing that the advertising deduction be amended to only allow a 50% deduction in the year of spend, and the remaining 50% amortized over the next five years. It’s likely some version of this proposal will be floated in 2025.
  • Tinkering with the advertising deduction remains a popular choice for Congress as they look to raise revenue, as they see it as a deduction that is easy to dial-up or down as needed to hit a target number.

The 4As is a founding member of The Advertising Coalition (TAC), an alliance of the nation’s leading media companies and trade organizations broadly representing advertising-centric businesses and interests across the country. The coalition advocates for fair taxation of our industry and the maintenance of the ordinary and necessary business deduction for advertising expenses.


Trends and Forecast

  • There have been several efforts in Congress since 2017 to single-out the deductibility of pharmaceutical advertising, i.e. completely removing the deductibility of pharmaceutical advertising to pay for Medicare and or Medicaid.
  • Budget reforms in 2025 will be heavily influenced by the Republican agenda, and will likely move via a process known as reconciliation, meaning it can’t be blocked by filibuster in the Senate.
  • While most of the focus around advertising taxation tends to take place in Congress, many states over the past few years have also been introducing various new forms of taxation on advertising.
  • 2025 is going to be a huge year for tax reform in Congress, and both the House and Senate are going to be hearing from lobbyists from all industries on a daily basis.
  • The good news is that the advertising deduction is not new, and it has a long history of bipartisan support. The 4As and its allies will be working to maintain that long standing support in 2025 as Congress finds itself under extreme pressure to produce a budget that doesn’t keep growing the deficit at the current rate.
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Capitol Hill Day 2025

If you’re interested in the process behind policy-making, building connections with key government figures and playing a role in advocacy, save the dates for the 4As and ANA Capitol Hill Day: May 6-7, 2025 in Washington D.C.

Customer Experience: A Catalyst for Agency Growth

A great customer experience can be as impactful - or indeed, more impactful - than an amazing ad. Today’s empowered consumers use digital technologies to make informed buying decisions, streamline their paths to purchase and engage with brands in new and unexpected ways.

Brand building has become much more than outbound communications. Every part of the customer journey - each ad exposure, every store visit (online or in person), any view of or engagement with a social post, the post-purchase and unboxing experience, etc. - all of that and more now contributes to that brand perception. And consumers tend to adopt new technologies faster than most brands, leading to a widening expectation gap between what people want and what most brands are able to deliver. Smart CX helps bridge that gap, and while most brands know they need it, they don’t always know what to ask for or where to turn. This creates a growth opportunity for agencies.

 

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The 4As CX Council

The 4As CX Council has been helping members share best practices and to advance their own CX disciplines since its founding in 2020. But to help spread that knowledge outside of the Council, and in an effort to shine a light on the importance of CX for the industry, the Council has been developing a CX Primer overview, which will be revealed in a webinar titled Why You Should Care About CX on 1/29/2025.

Closing Remarks

2025 promises to be an exciting year of opportunity notwithstanding ongoing and new challenges. From rebrands and agency transitions to rapidly advancing tech, evolving talent dynamics, the shifting legislative landscape and more, every aspect of our business is undergoing transformation. The pace of change has only accelerated in recent times – today is the slowest it will ever be. This requires agencies to become even more adept at building and fostering strong, lasting client relationships while simultaneously navigating and mastering the many facets of change with agility. While the paradox of embracing change and innovation with caution and responsibility may seem daunting, it holds the key to creating a more sustainable, inclusive future anchored by human experience and human intelligence. The 4As remains committed to supporting and empowering our members on this path. We will continue to deliver the necessary resources, expertise and opportunities for members to thrive and grow and remain your trusted partner throughout.

For me personally, this year marks an important milestone as I prepare to embark on the next phase of my professional journey at the end of May. Please know that the 4As will be in the capable hands of an amazing, collaborative team, passionate and energized about serving our members supported by a new leader at the helm. I'm excited by change and the possibilities of the future and more importantly, the ability to continue to feed my curious brain with new and exciting opportunities. Change, as they say, is a reliable constant and I am confident that the 4As and our growing member community are ready to leverage the opportunities and tackle the challenges 2025 brings.

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Marla Kaplowitz
CEO


Make the Most of Your Membership

Our commitment to empowering your success relies on your active participation as a member. A 4As membership offers access to a wealth of benefits including thought leadership, resources and industry expertise. The more you participate, engage and get involved, the greater your benefit.

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Tell Your Employees About Your 4As Membership Benefits

When your agency is a 4As member, every one of your employees is a member and has access to all of the membership benefits the 4As offers. Be sure to remind everyone at your agency to take advantage of their membership. All they need to do is register for an account on our website using their email and login to access all the resources included with membership. The true value of your 4As membership is realized when all your employees take advantage of our breadth of offerings.

NEW! Get Featured: Publish Content on Our Blog

We’re accepting original content from members and partners for our new blog. Share your point of view on industry topics and other content your colleagues and clients may find timely and relevant.

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NEW 4As Website: Your Enhanced Member Experience Is Here!

Our new website is designed for a seamless and efficient member experience, helping you find the resources you are looking for more easily and to help you maximize the benefits of your 4As membership.

Check out some of our key offerings and explore the website for more.


Connect Through our Communities

The 4As endeavors to bring together members in a variety of forums to enable peer-to-peer networking and discussion. There are a number of ways to get involved based on agency type, level and region.