蘑菇AV

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

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.

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.

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.

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.

Paid social search offerings differ significantly from traditional search ads

In another first, RE/MAX launched its real estate media network late last year, which will serve search ads for businesses related to home improvement, insurance, and safety. 鈥淲e want brands that are really going to elevate us and partner with us, helping the home-buyer and seller in their journey,鈥� said Abby Lee, executive vice president of marketing communications and events.

Search advertising inventory and retail media traffic may dip. This may not doom search engine advertising, but it will increase competition for premium ads adjacent to answers. Some large retail platforms may also benefit from a powerful on-site agent. Creators will probably gain in importance. As agents reduce happenstance discovery, creators will become more important curators of products.

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.

Though the ad industry has had a notoriously difficult year, search advertising is well positioned to grow in the years to come. On the consumer side, however, search behaviors are shifting, which could spell danger for those who don鈥檛 innovate.

Healthcare and pharma skews far more toward search advertising vs. social media and display. Search will account for 56.2% of healthcare and pharma digital ad spend this year鈥擭o. 2 among all industries we forecast, behind only travel. Total search spend will reach $12.42 billion in 2024, the fourth highest across all the sectors we cover. Spending is up 10.7% YoY and over 179% since 2018.

It will rake in nearly $24.54 billion in search ad revenues this year, making its search ad business more than 12 times bigger than that of Walmart, the next largest player in retail media search. Walmart is still one to watch.

The US financial services industry will spend $15.91 billion on search ads in 2024. That鈥檚 a 16.8% increase YoY, per our forecast. Financial services firms will also allocate a slightly above-average share of their total digital ad spend (43.9%) to search versus industries overall (41.2%). Click here to view our full forecast for US financial services industry search ad spending.

Target has taken buying search ads in-house. In March 2024, Target changed the way advertisers can buy search ads, bringing more advertisers into direct contact with Target鈥檚 ad sellers. Search ad sales had previously been handled by Criteo. 蘑菇AV research is based on the idea that multiple sources and a variety of perspectives lead to better analysis.

This shift could have major implications for search advertising, potentially requiring marketers to adapt their strategies for conversational, multimodal search queries. As voice assistants proliferate, marketers must adapt strategies.

罢颈办罢辞办鈥檚 Search Ads Toggle and campaigns using manual placements on Meta platforms give advertisers the choice to include search ads alongside other social formats. However, if an advertiser uses Advantage+, there is no option to go without search ads. There鈥檚 no special creative for social search.

鈥淎I tools changing consumers鈥� search behavior will have a massive impact on use of Google Search, which in turn will drive a large shift in ad budgets that currently spend heavily on 础诲飞辞谤诲蝉,鈥� said Leslie Lee, senior vice president of marketing at Vistar Media.

We forecast that Google鈥檚 search ad revenues would grow to $67.32 billion in 2024, a 15.3% YoY change. Google鈥檚 supremacy in search, browsing, and mobile traffic remain unchallenged in 2024. Its web services and tools continue to shape the digital landscape, and significant contributions to bot traffic reflect its influence on search indexing and web monitoring.