Introducing The AI Ad Economy — Where Consumer AI Behavior Meets Advertising

Here comes the next big ad economy…

I’ve spent nearly my entire career analyzing emerging advertising economies.

The first time was when I was living in San Francisco. I had just moved west from Chicago to help John Battelle, the legendary managing editor of Wired, develop his idea for a new business magazine.

The task John gave me and a few other contractors was simple in tone, monumental in actuality. “Define and size the internet economy,” he told us.

We spent weeks debating what the components of the economy were, how they related to one another and which companies were going to become the power players.

The magazine that resulted from our work — The Industry Standard, the newsweekly for the internet economy — was an extraordinary success at first. It had more ad pages in one year than any other magazine in the US. John hosted legendary Friday evening parties on our office’s rooftop. There was a holiday celebration one year at San Francisco’s City Hall. And then, it all crashed as the dotcom boom gave way to a (temporary) bust.

I moved on from journalism after that and became an analyst at digital marketing research firm eMarketer. There, I defined and sized a different economy: social media.

Starting in 2006, I spent 17 years analyzing the companies that made up the social media economy — the platforms, ad agencies, tech suppliers and publishers that participated in its growth. And importantly, I researched the behaviors of the consumers at the heart of the economy.

This economy did a lot better than the early internet economy we covered in The Industry Standard. In 2025, businesses will spend more than $300 billion on social media advertising worldwide.

When I launched my independent research firm Sonata Insights in 2024, I knew another new economy was emerging, one that was centered on AI but with similar components to economies I’d previously studied — including ad agencies, tech suppliers, publishers and yes, consumers.

I didn’t give a name to this new economy when I founded Sonata Insights, but now I am.

Welcome to The AI Ad Economy.

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