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Why it matters: Although Google鈥檚 share of search advertising revenues dropped below 50% for the first time this year, the company remains the ad goliath all challengers must contend with. Google鈥檚 declining digital ad share is partly due to competitive pressures from the likes of Amazon and TikTok.

In January, the most interesting retailers capitalized on New Year鈥檚 trends like resolutions, lower-alcohol consumption, and an influx of holiday returns. Poshmark and Sephora introduced new partnerships, while Amazon and Temu increased their own retail media-related offerings. Here are the eight most significant retail developments of January 2024, ranked by their potential market impact.

Social search ads and genAI players like ChatGPT and Perplexity also pose a threat to traditional search ad revenues. But Google isn鈥檛 going away. 鈥淕oogle鈥檚 status as the default search engine across most major browsers and devices will help protect its dominance,鈥� Mitchell-Wolf said. 3. Retail media will face growing pains.

Note: Digital ad spending includes banner ads and other (static display ads such as Facebook's News Feed Ads and X's Promoted Posts), classified ads, email (embedded ads only), mobile messaging (SMS, MMS, and P2P messaging), rich media (including in-stream and outstream video ads), search ads (including contextual text links, paid inclusion, paid listings, and SEO), sponsorships, lead generation (referrals

Instead of casting a wide net on social platforms and pursuing the creators with the highest follower accounts, marketers are now more focused on resonating with the right audience.

Microsoft bets big on AI and cloud, but TikTok acquisition could reshape its ad strategy: Investors weigh future growth against spending risks and competition.

Much of RMNs鈥� early success came from advertisers鈥� interest in buying search ads close to the point of purchase on retailer websites. But FMNs don鈥檛 have owned channels where users spend a lot of time shopping. And the apps and websites financial institutions have are ones consumers tend to navigate with the mindset of managing and saving money, rather than spending.

Integrating real-time search could double or triple its usage, unlocking opportunities for future search advertising expansion. Expect other genAI startups to rush to productize search either through content partnerships or by launching standalone apps.

In seven charts, this report tells the story of some of the most critical trends that digital leaders need to know about in 2024 and beyond.

OpenAI rolls out free search to capture shoppers during a peak ecommerce season, offering price comparisons and product links just when consumers need them most

Google is rolling out new features for its AI-powered Performance Max advertising platform, giving marketers more control over their campaigns and deeper insig

All that said, even if OpenAI and Perplexity were to develop novel search ads, we expect Google to be the dominant player in that category for some time to come. Keep reading: Check out our Tech Briefing鈥檚 coverage of this development.

Another 83% say they鈥檙e investing in on-site search ads, demonstrating the continued importance of lower-funnel/performance marketing tactics. Nearly 80% of US RMN ad spend will go toward on-site ads next year, per our forecast. However, off-site鈥檚 share of total ad spend will grow over the next few years. 3. Proving, optimizing ROI is crucial for continued marketer investment.

Advertisers should be setting up campaigns for success with genAI search ads now, both on Microsoft鈥檚 ad platform and on other platforms that have genAI search ad formats, such as Google and Perplexity. GenAI search ads will enable brand advertising in a performance marketing context, Sainsbury-Carter said.

Search ads on social are still nascent, so marketers must use organic tactics to appear in results. Users are treating social platforms like search engines. They鈥檙e still using Google and other more traditional forms of search. But many users鈥攑articularly Gen Zers鈥攑refer to start their searches on other platforms, including Instagram, TikTok, and YouTube.

You also saw platforms like TikTok really lean heavily into new search ad formats. And almost every single platform, including Snapchat and Pinterest also struck ad deals with Amazon, kind of bringing retail media and social closer together. So now it feels like we're at this inflection point where you have consumers and the platforms all in on social search.

Marketers are already invested in search advertising; 62.2% of US retail media ad spend will go to search this year, per our March 2024 forecast. That鈥檚 a place marketers should keep investing in as image-based search makes searching in marketplaces even more useful for consumers. 5. CEOs are taking steps to ensure responsible AI use鈥攂ut there鈥檚 room for improvement.

The shift to AI-powered search could significantly disrupt traditional search advertising. As AI search engines often provide a single authoritative-sounding answer rather than multiple results, the stakes for marketers have become higher. This 鈥渨inner takes all鈥� scenario heightens the pressure to be the top source for queries.