According to multiple surveys, including the most recent from Smartly, marketers are planning to increase their budgets in 2025. But where? According to Smartly’s 2025 Digital Trends Report, which includes responses from nearly 500 marketers that spend at least $2 million in paid social annually, 75% are increasing their budgets in 2025, and 74% are increasing their investment in conversational ads, also called conversational commerce.
What are conversational ads? These are ads that enable brands to engage in two-way dialog with prospects and customers through SMS and direct messaging within a desktop or mobile display ad. Once a user engages, a “conversation” begins. Typically, this conversation is facilitated by a chatbot or automated system (although occasionally by a human agent). The chatbot can ask questions, provide information, or in some cases, even complete transactions.
“Hi! What’s your name?”
“Susan.”
“Hi, Susan. What are you looking for today?”
“I’m looking for a dress for a wedding.”
“Great! What color did you have in mind?”
These ads are nothing new. Just go on YouTube and you’ll see examples back from four years ago. However, 70% of Smartly respondents say these “chat-based ads” will be a focus in the coming year. Among those whose budgets are growing, this rises by 10 percent.
Where can you expect to see conversational ads? All over, but marketers are investing more heavily in some social media platforms than others. According to Smartly, 58% of respondents plan to spend more on YouTube this year. Here are the other platforms where they are planning to spend more:
Source: Smartly 2025 Digital Trends Report
Interestingly, when you seek out examples of conversational ads, even the older ones reflect chatbots that aren’t that different from the ones we interact with today. While you might be in for a sore disappointment if you expect even modern chatbots to engage in actual conversation, there are things they can do fairly well, such as product search and details, adding items to the shopping cart, disseminating content (such as videos, coupons, text, and providing reviews and ratings, and store/product locators.
But growing in popularity or not, conversational ads aren’t a slam dunk. They have drawbacks, too. Not all social media platforms offer easy integration, and there is always the potential for poor (to put it mildly) user experience. We’ve all experienced the nightmare chatbot that is useless and infuriating. One would assume that, before investing in conversational ads, marketers would have a well-functioning chatbot, but that’s not always the case.
Still, expect to see more of them. With advancements in AI and chatbot technology, the ubiquity of messaging apps, and with platforms like Facebook, Google Ads, and LinkedIn now offering tools and options to create interactive conversational experiences, expect conversational ads to continue to pop up everywhere.
