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Search advertising industry could be monetizing AI chats too soon: Much rides on Bing Chat ads鈥攁nd how it impacts user experience.

Advertisers buy search ads on keywords or word combinations. Search advertisers can use genAI to identify new keywords, group them in novel ways, and assess match levels that they may not have considered. How will it create impact?

Still, OpenAI is continuing its hiring spree of advertising professionals, including talent from key competitors like Shivakumar Venkataraman, previous vice president of Google鈥檚 search advertising team鈥攊ndicating that advertising might indeed be in its future.

The news: Google rolled out Carbon Footprints for Google Ads to track emissions on Search Ads 360, Campaign Manager 360, Display & Video 360, and Google Ads.

Google's search advertising empire continues to expand. Search remains the primary driver of Google's revenue growth, riding a 12% increase to $49.39 billion in Q3. We expect Google search revenues to grow 10.3% to $156.26 billion this year. Google's overall advertising revenues for the quarter reached $65.85 billion, up 10% YoY. But a shifting landscape may be on the horizon for search dominance.

Microsoft versus Google: Which AI-powered approach to search is best? The fate of the $150 billion search ad market could be soon transformed.

Copilot outperformed traditional search ad relevance by 25% and doubled click-through rates last year, per Microsoft. Our take: AI-powered ads could be a key contributor to Copilot鈥檚 growth efforts, as the technology has struggled to impress enterprise customers in the past.

Show breakdowns of display versus search advertising and the share of mobile spending by industry.

Key stat: Google鈥檚 share of US nonretail search ad spend has declined since 2021, when the company saw $57.49 billion in US search ad revenues, according to our forecast. Among Google鈥檚 rivals outside of retail, both Microsoft and Apple are growing their search revenues faster.

Key stat: 61% of US paid search marketers think future chat-based search advertising will be very or extremely effective, according to NP Digital.

On today's episode, we discuss how AI search ads will most likely work, how big of a problem reputational brand damage could be in an AI-content-generated world, and what generative AI can do for companies today. Tune in to the discussion with our analysts Jacob Bourne and Gadjo Sevilla.

But as the social platforms iterate on their search ad formats next year, Google and other traditional search platforms will get squeezed. Predictions. Meta will launch AI search ads. The battle for dominance in AI search will largely be determined by who can monetize most effectively. Reddit will lean into recommendations.

TikTok and Amazon join the ranks of Google (and to a lesser degree Microsoft) as places where consumers start their searches. Meanwhile, audience-based targeting is becoming a more privacy-compliant way to reach consumers. And of course, generative AI will change search as we know it, though no one can be sure of how鈥攜et.

Generative AI search engine Perplexity will launch ads in the next few quarters. But while advertisers probably don鈥檛 need to form Perplexity ad strategies just yet, they should keep an eye on how the search engine is approaching monetization for clues into what Google (and other emerging search competitors) could do in the future.

The migration of users to non-ad-supported platforms like OpenAI鈥檚 ChatGPT has started pressuring traditional search revenues. Fastest-growing channels. Retail media is the fastest-growing digital advertising channel. It will grow 12.2% this year after more than doubling between 2021 and 2025. We expect double-digit annual growth until 2028. A rapid expansion in ad inventory is helping fuel growth.

Professional fields like finance and legal research will sustain subscription models, while general search consolidates around ad-supported platforms鈥攅xpanding the overall search advertising market through increased user engagement. A two-tiered landscape will emerge in retail search.

Advertisers will increase their spend on US retail media search ads every year of our forecast period in 2028, when it will see its most growth at 23.4% YoY, according to our March 2024 forecast.

B2B display ad spending in 2024 will outpace search ads, with 16.3% YoY growth. Video advertising will rise 14.1%, driven by platforms like YouTube. LinkedIn and Meta dominate B2B social ad spending. LinkedIn will capture 47.2% of B2B display ads, while Meta鈥檚 targeted ad tools remain a key revenue driver in 2024.

Paid social search offerings differ significantly from traditional search ads

Consumers (particularly Gen Zers) increasingly turn to social media to begin their shopping searches because of its highly visual, creator-driven content. To capitalize on this behavior, social platforms are building out search ad capabilities. But it鈥檚 still early days, so don鈥檛 dump Amazon or Google just yet.

On today's episode, we discuss how concerning Google's drop in search ad revenues is, the likelihood of Google getting broken up by the US Department of Justice, and the main reason YouTube is struggling. "In Other News," we talk about which cookie alternatives are emerging as favorites and the significance of Microsoft adding ChatGPT's AI technology to its search engine, Bing. Tune in to the discussion with our analyst Evelyn Mitchell.

CPG digital ad spending hits $48.79 billion in 2024: Its strength is driven by D2C strategies and increased search advertising.

On today's episode, we discuss some predictions for 2023 that are too specific to be 100% certain but could still come true, including: why Microsoft would want to buy Roku, whether TikTok will make a splash in search advertising, who will be the runaway retailer of the year, if Instagram's new Twitter competitor app will be a hit, and more. Tune in to the discussion with our analysts Debra Aho Williamson, Andrew Lipsman, and Paul Verna.

Google brings a transparency overhaul to search advertising: Move responds to uproar after report that ads were placed on problematic sites.

Retailers will spend 44.2% of digital budgets on search advertising this year, 3 percentage points above the 41.2% average for all industries. The share of spending going to display versus search will remain fairly stable through our forecast period. Retailers will spend over $36 billion this year on search advertising, $16 billion more than CPG (the next highest-spending industry).