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Microsoft will grow its US search ad revenues 9.0% this year鈥攎ore than three times as fast as Google. In 2024 and 2025, its search ad revenue growth will rival that of Amazon. Apple鈥檚 App Store ads are an immense success. Apple鈥檚 ad revenues will top $5 billion in 2023, having nearly quadrupled over the last five years.

Search, ads, and services are getting supercharged. This has wider implications since Google is using its dominance in Search to integrate generative AI results. Search results will generate an AI-powered snapshot of key information to consider, with links to dig deeper.

Search, social, and customer ratings and reviews are the most influential channels for driving foot traffic and sales, according to SOCi鈥檚 Local Visibility Index 2024.

But given Google's reliance on search revenues, it can't afford to not get this right.

Focusing primarily on search revenue deals, the DOJ鈥檚 suit deals with a different aspect of Google鈥檚 business than the class-action complaint, which will break open another front on which Google must defend itself.

As 2023 comes to an end, this is the data you need to kick-start 2024.

Meta and TikTok will venture into search advertising. As Facebook and Instagram look for new ways to kick-start their ad businesses after a difficult 2022, search ads would allow them to take advantage of existing shopping behaviors. And there鈥檚 precedent: Facebook experimented with search ads in 2012 and 2018.

US retail media search ad revenues will grow at a rate nearly four times faster than the rest of search advertising this year, according to our forecast. Amazon will account for nearly all of the $29.69 billion US retail media search ad spend this year, though Walmart and Instacart are also contributing to retail media鈥檚 share of search ad spend, per our forecast. 3.

However, Lipsman warned that, despite D2C dollars shifting to Google, it may not be able to keep its grip on search advertising for long. Google鈥檚 share of US search advertising is down five points over the past three years to 56.1%, while Amazon has increased its share by nearly 10 points to 22.6%.

Meta鈥檚 powerhouse ad platform also gives it a leg up in monetization as genAI search advertising gains steam. Meta is a staple in most marketers鈥� ad strategies and will account for 22.8% of worldwide digital ad spending in 2024, per our forecast. Both Facebook and Instagram already offer some search ad placements, while WhatsApp monetizes via business messaging tools.

That鈥檚 not to say that this should replace search advertising, though. For search ads to be effective, you need a catalyst鈥攁 broken-down car, a mole-infested lawn, or a clogged drain. Your brand can be more proactive than that. How does it work? Retail media sites can segment their audiences by using dozens of first-party data traits such as habits, behaviors, basket size, and geography.

鈥淚n 2022, retail media hit the first of many milestones when it became the fastest US ad channel to eclipse $30 billion in spending鈥攏early twice as quickly as it took social media,鈥� our analyst Max Willens said on a recent Meet the Analyst webinar. 鈥淭hat was just the start.鈥�

Nearly 80% of advertisers are using at least one AI-powered search ad product. AI tools such as Dreamscreen and YouTube Create are revolutionizing content creation, Alphabet chief Sundar Pichai said. The company also called out Spotlight Moments, launched last week, which uses AI to identify trending content for brand sponsorship.

Look out for more coverage on generative AI鈥檚 threat to the search ad business in Q2 2023. Sign up for alerts here. What are generative AI鈥檚 most promising media and advertising use cases?

AOV from Google Search ads climbed just 5% over the course of the Cyber Five, down from 10% growth last year. Going once, going twice: Throughout the third quarter, Walmart鈥檚 share of Google Shopping impressions was running below 2021 levels.

Our take: Our forecast predicts 7.2% growth in Google search ad revenues this year and 9.8% in 2024. But if Bing captures even a small portion of Google's searches, it will affect Google's ability to serve enough ad impressions to meet its revenue targets.

Beyond the chart: Google will account for a hefty 53.9% of US search ad revenues in 2023, though the company鈥檚 share has been shrinking each year since hitting 57.2% in 2021, according to our forecast. Microsoft is far behind, capturing 5.2% of US search ad spending this year, a share that is also decreasing, per our estimates.

To avoid stepping on its own toes, Microsoft will have to tread lightly with AI search ads. Which businesses will AI search disrupt first? Outside of Big Tech, publishers and agencies working with smaller brands will notice the toll of AI first.

TikTok is leaning into those behaviors through search ads and a new partnership with Google, and those moves could add further fuel to TikTok鈥檚 commerce business. Instagram has also launched ads in search results, while Facebook has long hosted ads in Marketplace. But TikTok won鈥檛 be Amazon.

That helps explain why Walmart鈥檚 search ad revenues will increase 30.4% this year鈥攁lmost twice as fast as Target鈥檚 and Amazon鈥檚. Target hopes to take a page from Walmart, while also maintaining the curated feel of its marketplace. Go further: Read our Retail Media Search Forecast and Trends 2024 report.

The news: Google search ads are being displayed on a wide array of non-Google websites, including some hosting pornography and pirated material, research from industry activist Adalytics has uncovered. These sites include entities in countries under US sanctions, notably Iran and Russia.

More mature RMNs are more likely to have easy-to-use self-serve capabilities, a variety of ad formats, and high search ad relevance鈥攂ut they may also have heavier ad loads. Newer RMNs must first reach parity on table stakes offerings, and then look for opportunities to beat the competition. Search ad relevance is a massive untapped opportunity because few RMNs do it exceptionally well.