Credit: Igor Omilaev via Unsplash
The Australian digital advertising sector is reshaping its data practices in response to growing privacy regulation, signal loss and advances in AI, according to the IAB Australia Data State of the Nation Report 2025.
The report, developed by the IAB Australia Data Council, found 92% of industry decision-makers rate data use as critical or very important to commercial success, with many investing in new tools, strategies and partnerships to stay ahead of regulatory and technological shifts.
Awareness of the federal government’s Tranche 1 Privacy Act reforms remains mixed, 44% rated their understanding at 6 or higher on a 10-point scale, though 67% say they are at least somewhat prepared.
Many businesses are already adjusting data mixes, measurement approaches and personalisation strategies in anticipation of change.
Contextual targeting and data clean rooms are the most widely used solutions to address privacy shifts. Clean room adoption is growing significantly year-on-year.
Confidence is highest in contextual targeting (89%) and identity solutions (74%).
AI uptake remains cautious.
Just 32% of respondents said their companies had operationalised AI in at least limited use cases for media planning or activation, while 51% remain in exploratory phases.
Only 9% have scaled AI across campaign workflows, compared with 30% of agencies, brands and publishers in the US.
Most AI use is driven by accessible tools: 71% are using general-purpose platforms such as ChatGPT, and 56% are using AI features within existing tech platforms.
“The findings reflect a pragmatic industry adapting to both opportunity and obligation,” said technology lead at IAB Australia, Jonas Jaanimagi.
“We’re seeing strong momentum behind contextual targeting, increased emphasis on first-party data, and growing experimentation with AI, all in response to a rapidly evolving privacy landscape.
“When used responsibly and with clear consent, data plays a critical role in funding the open internet by supporting free content and services.
“As we navigate regulatory and technological shifts, aligning innovation with transparency will be key to long-term sustainability.”
The report found that 74 per cent of respondents say privacy changes are affecting personalisation tactics, while 81 per cent want standardised industry protocols for AI privacy and protection.
The main applications of AI include audience segmentation and cross-channel campaign optimisation. Key concerns cited are data security, accuracy, and a lack of standards.
“The results show that data maturity is accelerating across the industry,” said chief digital and technology officer at Spark Foundry Australia, Rachida Murray.
“We’re seeing real investment in clean rooms, updated measurement strategies, and stronger internal capability to meet both privacy expectations and performance goals.
“AI is part of that shift, but the emphasis is now on thoughtful integration, not just experimentation.
“As regulations evolve and technology shifts, the focus needs to stay on building a data environment that is transparent, secure and fit for the future. Industry-wide collaboration will be essential to get there.”
The Data State of the Nation Report 2025 is based on a July 2025 survey of 103 advertising decision-makers across agencies, trading desks, media owners, technology vendors and marketers.
This is the third wave of the study.
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