Display advertising faces its biggest shake-up in decades
The digital marketing playbook is about to be rewritten. Forrester predicts marketers will slash display ad budgets by 30% in 2026, as audiences abandon traditional open web environments for AI-powered✦ summaries, connected TV (CTV), and streaming platforms. This seismic shift forces Asia-Pacific brands to rethink where and how they engage consumers.
The writing is on the wall: declining click-through rates, shrinking reachable audiences, and poor ROI from standard display campaigns signal the end of the scattergun approach. Instead, entertainment-first formats and AI-driven✦ discovery are emerging as the new battlegrounds for consumer attention.
The great migration: where audiences are heading
Consumer behaviour is fragmenting across multiple touchpoints. While people remain cautious about generative AI✦, they're increasingly turning to AI-generated summaries and chat interfaces that bypass traditional display ad environments entirely. This creates fewer opportunities for brands to reach audiences through conventional banner advertising.
Streaming consumption dominates across Asia, whilst ad-blocker usage and attention fatigue continue rising. The once-reliable open web display model now looks increasingly obsolete, particularly in mobile-first markets like Indonesia and the Philippines where attention spans are shrinking.
"Marketers are set to slash display ad budgets by 30% in 2026 as consumers increasingly move away from the open web." , Forrester Research
Connected TV and streaming audio are capturing the budget reallocation. These channels offer richer storytelling opportunities, longer dwell times, and more controlled environments where brands can access viewers directly without competing with multiple banner ads on a single page.
By The Numbers
- Marketers plan to cut display ad budgets by 30% in 2026 as audiences shift to AI-driven discovery and CTV platforms
- 63% of marketers intend to increase CTV ad spend in H1 2026, matching digital display and video as top categories
- Programmatic CTV is projected to claim 26% of media budgets on average in 2026, up 3% from the prior year
- CTV advertising spend is forecasted to reach $37.95 billion in 2026
- 68% of advertisers identify CTV as the most critical channel in their 2026 media mix
Agency models transform as principal media rises
The agency ecosystem✦ faces structural upheaval. Traditional "agent" relationships are giving way to "purveyor" models where agencies sell execution, managed services, and proprietary products rather than simply buying media on behalf of clients. Major players like dentsu and Havas Media Network are developing principal media offerings that integrate AI into media trading.
This shift brings job cuts and consolidation. After an 8% average headcount reduction in 2025, agencies will eliminate 15% of positions in 2026. Principal media models, where agencies resell inventory with margins and guarantees, will account for about a third of media under management by 2026.
"You want to follow where the audience is spending their time." , Krystal Vivian, Federated Digital Solutions
Contract structures are evolving from retainer-based to project-based and outcome-focused arrangements. For APAC clients, this means the agency relationship you established five years ago may look completely different by 2026's end.
Strategic pivots for APAC marketers
Smart brands are already repositioning their media mix. The key is thoughtful reallocation rather than wholesale abandonment of display advertising. In mobile-first Southeast Asian markets, display opportunities still exist through local apps and ad ecosystems, but they require more targeted approaches.
Consider these tactical shifts:
- Analyse display inventory quality: measure time on site and downstream conversions, not just click-through rates
- Explore AI-powered discovery channels: voice assistants, chat interfaces, and embedded summaries
- Invest in premium streaming and CTV formats for richer storytelling opportunities
- Develop hybrid online-offline campaigns that combine digital reach with physical touchpoints
- Renegotiate agency contracts toward outcome-based pricing and AI-powered solutions
Regional nuances matter significantly. Singapore and South Korea may favour digitally-enhanced physical activations, while markets like Thailand and Malaysia might benefit from localised streaming content partnerships. Understanding how AI skills impact career development becomes crucial for marketing teams navigating this transition.
| Traditional Approach | 2026 Strategy | APAC Considerations |
|---|---|---|
| Display banner focus | CTV and streaming audio | Mobile-first optimisation |
| Open web targeting | AI-driven discovery | Local platform integration |
| Agency retainer model | Outcome-based pricing | Regional compliance needs |
| Digital-only campaigns | Hybrid online-offline | Cultural activation preferences |
The measurement challenge ahead
Confidence in marketing measurement is declining. Only 72% of B2C marketing leaders will feel confident about measuring business impact in 2026, down seven percentage points from 2025. This uncertainty stems from fragmented touchpoints and evolving attribution models.
Building robust✦ measurement frameworks now becomes critical. Brands need to establish baseline metrics across CTV, streaming, and experiential channels before the full transition occurs. The shift toward AI-powered customer engagement requires new approaches to tracking and attribution.
Asia's regulatory landscape adds complexity. Data sovereignty✦ requirements and platform restrictions may limit CTV and social measurement capabilities compared to Western markets. Privacy regulations across different APAC jurisdictions demand localised tracking approaches.
What does the 30% display budget cut actually mean for brands?
It represents a reallocation toward more engaging formats rather than a reduction in total advertising spend. Brands are shifting budgets to CTV, streaming audio, social video, and experiential marketing where audiences spend more time and show higher engagement rates.
Will display advertising disappear entirely in Asia?
No, but its role will diminish significantly. Mobile-first markets in Southeast Asia still offer display opportunities through local apps and ecosystems. The key is strategic targeting rather than broad reach campaigns that characterised the previous decade.
How should agencies prepare for the principal media shift?
Agencies must develop proprietary technology, data capabilities, and outcome-based pricing models. Traditional media buying roles will consolidate whilst strategic consulting and execution services expand. Investment in AI-powered tools becomes essential for competitiveness.
What offline experiences work best in APAC markets?
Success varies by market. Singapore and South Korea favour technology-enhanced activations with QR codes and mobile integration. Markets like Thailand prefer immersive brand experiences that blend local culture with digital elements for authentic engagement.
When should brands start reallocating their display budgets?
Immediately. Test CTV and streaming campaigns now whilst display inventory remains relatively affordable. Early movers will secure better placements and partnerships before competition intensifies. Establish measurement baselines before the full transition accelerates in 2026.
The display advertising model that defined digital marketing for two decades faces its biggest disruption yet. As audiences migrate to AI-powered summaries, streaming platforms, and connected TV, brands must evolve their engagement strategies. The 30% budget cut predicted by Forrester represents both challenge and opportunity for APAC marketers willing to embrace change.
Success requires understanding where your specific audiences consume content and building measurement frameworks that capture value across fragmented touchpoints. The brands that will thrive are those investing in AI-powered marketing capabilities whilst maintaining authentic connections through meaningful offline experiences.
Are you ready to pivot✦ your media strategy toward streaming, CTV, and AI-driven discovery, or will you wait until display budgets have already shifted? Drop your take in the comments below.
Latest Comments (8)
This 30% cut prediction by Forrester is certainly significant for 2026. Given the Malaysian digital economy blueprint emphasizes inclusive digital transformation, how might this shift impact smaller local businesses in their transition from traditional to digital advertising, especially if their foundational understanding leans heavily on display ad models? It raises questions for our national AI roadmap.
wow 30% cut by 2026 is wild! I've been seeing a definite pivot towards video for a while now but that Forrester prediction is a huge number. Makes total sense with how people are consuming content now, especially with tools like HeyGen making video creation so much more accessible for brands.
If consumers use AI for summaries, how marketers track attribution from new AI discovery model? This part unclear to me.
this whole "AI-driven discovery" thing is interesting, especially if it's bypassing traditional ads. but i'm a bit skeptical about how well it'll work in practice for languages beyond english. we're building an AI for vietnamese, and getting it to summarize and chat naturally, let alone influence discovery, is a huge challenge. the data just isn't there like it is for english. so while the open web might be shrinking, i wonder if the "AI-driven" replacement will really be as universal as forester suggests, or if it will mostly benefit the big english-speaking markets first.
Forrester's prediction of 30% cuts to display ad budgets seems aggressive. While AI-driven summarization, like what Qwen or DeepSeek can do, will shift discovery, the complete bypass of open web might be overstated.
Forrester's prediction of 30% display budget cuts by 2026 really makes sense when you look at what's happening in Thailand! 🇹🇭 We're seeing so many people here skipping traditional open web and going straight for AI summaries or streaming. My friends are all about TikTok and LINE TV now, not really clicking banner ads anymore. This shift to CTV and social video for "richer storytelling" definitely aligns with how brands are trying to connect with audiences here. It's like the old ways are just not hitting anymore, especially with ad blockers everywhere! 📉
this whole thing about AI-driven discovery bypassing traditional ads is so interesting. we're seeing something similar with Vietnamese language AI too. even though the models aren't perfect yet, people are definitely trying to get info in new ways through chatbots or summaries, rather than digging through websites with a million banner ads. it makes me wonder how long until these AI summaries themselves become a new ad placement opportunity here in Vietnam. especially for non-English content, where the open web experience can be pretty cluttered and low quality. we're working on making our NLP good enough to surface truly useful info, but the ad potential is always in the back of my mind!
the idea of "controlled environments" for brands in CTV worries me. are we just shifting from one surveillance model to another, but with a glossier interface? what about consent in these immersive spaces?
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