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Retail will only use 52.7% of its dollars on display, leaving $33.09 billion for search ads. Finserv will only spend 53.7% on display, leaving $13.14 billion for search. Video advertising is now the preferred form of display advertising for every industry.

We forecast Google will garner $62.87 billion in 2024 search ad revenues in the US alone. "This is momentous purely from the standpoint of this is something that has been close to a decade in the making," our analyst Max Willens said on a recent episode of the "Behind the Numbers" podcast.

Google, already defending its share of the search advertising market against Amazon and TikTok, rushed to compete. Microsoft鈥檚 US search ad revenue growth will outpace Google鈥檚. Its 9.0% growth rate is more than three times what Google will achieve this year, and that margin will widen over the next few years, according to our forecast.

Google search revenues: $48.5 billion (13.8% YoY increase). YouTube ad revenues: $8.7 billion (13% YoY increase). Net income: $23.6 billion (28.3% YoY increase). Operating income: $27.4 billion (25.7% YoY increase). Diluted EPS: $1.89 (31.3% YoY increase). Why it matters: Google is No. 1 in its market, and it shows no signs of slowing down.

The company also forged connections with brands at Cannes, where it touted its search advertising and product discovery potential. In context: Despite beating expectations, Reddit stock fell more than 4% in after-hours trading. Low ARPU growth could be a thorn in the company鈥檚 side, raising concerns about its ability to bridge the enormous revenue gap with other social platforms.

Spending has shifted due to the popularity of social media, the changing B2B search ad landscape, and the importance of mobile. Key Question: What factors are affecting growth trends in US B2B digital advertising in 2023? KEY STAT: After a period of rapid growth during the pandemic, B2B digital ad spending growth will slow considerably to just 8.1% YoY in 2023. Executive Summary.

A successful SearchGPT could cut into Google鈥檚 search advertising revenue and alter existing ad cost structures. Google might need to reconsider its relationships with publishers and content creators as AI alters web traffic patterns. Our take: Google Search owns 91% of the search market. It reported $175 billion in revenues from Search and attached ad sales in 2023.

Experiment with search ads on social media. Testing regular search ads on any of the social platforms that offer them can provide insights into what may work鈥攁nd what may not鈥攊f and when ads become more widespread on social media genAI chatbots. Sources. Bloomberg Intelligence. Big Village. Deloitte. Morning Consult. TD Cowen. YouGov.

It's still early days for search ads in AI Overviews. Ads are already being served in AI Overviews. At its Marketing Live event on May 21, 2024, Google announced that it will start testing search and shopping ads in AI Overviews when the ad is relevant to the query and the content in the Overview.

A return to profitability in the travel sector has allowed airlines, hotels, cruise lines, etc., to reinvest in advertising and brand messaging around promotions, loyalty programs, and lower-funnel targeted keyword search ads. Travel stands out from other industries in its sustained spending growth.

Case in point: Google鈥檚 1.87% search revenues bump was dramatically lower than its 24.28% growth a year earlier and the 30.11% jump in Q1 2021.

Advertising revenues took a hit across the board; YouTube ad revenues were $7.96 billion versus an expected $8.25 billion, Google Search revenues fell by nearly $700 million YoY, and Google Network revenues fell more than $800 million YoY. Google Cloud revenues jumped 32%, accounting for most of Google鈥檚 gains in the quarter.

Google鈥檚 tough year of regulation gets tougher: The EU is reportedly planning to penalize Alphabet for Google鈥檚 favoritism in search results.

Search advertising is the best example, and will account for 28.6% of total ad revenues in 2022: Advertisers shifted more of their budgets toward search, an essential if unsexy way to ensure that limited budgets have the greatest impact. The stalwart effectiveness of search marketing kicked off a race in Big Tech to capitalize on search revenues.

Looking ahead: We predict Google will claim 53.9% of US search ad revenues in 2023. That鈥檚 down from 2021鈥檚 peak at 57.2%. Conversely, we predict Microsoft will pull in 5.2% of US search ad revenues this year. While Microsoft has a long way to go to close that gap, positive early reports from its AI-powered Bing launch could leave Google searching for new options to stop its search ad drop.

Search ads will pace that growth. In 2023, advertisers will spend almost $30 billion on retail media search ads. By 2027, that figure will be more than double, rising to $63.20 billion. But major display growth is also in the foreseeable future.

The competition: Google is still the undisputed king of search advertising, with a projected $57.49 billion in US search ad revenues this year, per our forecast. Despite being an early mover in generative AI search, Microsoft is well behind Google, with a forecast $5.84 billion in US search ad revenues this year. 鈥淚 think Bing Chat is the best AI product that鈥檚 out there right now,鈥� said Ray.

Search ads will pace that growth. In 2023, advertisers will spend almost $30 billion on retail media search ads. By 2027, that figure will be more than double, rising to $63.20 billion. But major display growth is also in the foreseeable future.