The AI revolution keeps moving forward despite recent market problems. New AI breakthroughs show up across more industries every day. Many people debate how AI affects advertising. But one area moves fast with big effects beyond its small size - AI search. Advertisers need to plan for this right away.
Many of us use AI search without knowing it. Studies suggest that over 11% of Google searches show AI-created summaries. New answer machines like Perplexity handle 20 million questions daily through paid business products. Microsoft Copilot and ChatGPT search also grew, thanks partly to smart brand ads.
These changes have not gone unnoticed. During recent earnings calls, Google leaders praised their AI Overviews product. They said it makes users happier and brings in money at about the same rate as regular search results. Google really needs to succeed here, but it might face short-term problems.
People like AI because it gives answers faster than clicking around websites. This probably means fewer searches overall but perhaps from people more ready to buy. Experts at Gartner say normal search engine use will drop 25% by 2026. Questions remain about the best ad types and pricing for AI search.
AI answers take up space usually filled by ads on Google. This makes changes to ad placement almost certain, along with growing pains. Perplexity uses sponsored follow-up questions as ads, similar to native advertising. They charge per thousand views instead of per click. Microsoft tests different ad types with mixed results.
This year makes sense for big upfront ad spending. As users find answers faster through AI and cracks appear in normal search numbers, new formats and other media need to fill the gap. For many direct response advertisers, display ads come closest to replacing search ads.
Unfortunately, display ads face problems as fewer searches lead to less traffic for publishers. Some early signs suggest this might not happen evenly yet. Google and others add source links into AI answers. But the trend toward fewer or different searches hurts search-dependent sites that create lots of display ad space.
All this adds pressure to video, TV, and social media ads. Although video-on-demand prices may drop slightly next year, this might not last long. The fall of traditional SEO also drives up ad prices. Brands that depend on organic search see major traffic drops, creating holes only paid media can fill quickly.
As time passes, content creators must change how they market to AI agents and influence AI training data. Users expect immediate AI answers everywhere. Brand marketers face the challenge of meeting these higher expectations at every customer contact point. The opportunities vary by industry but exist for everyone.
Companies spend years building first-party data systems. They can use this foundation to improve AI models for many purposes and force important connections across their technology stack. Where AI lives determines how the whole system evolves. Brands can control more of this future or give power to big tech platforms.
Ten years ago, advertising led to early AI adoption. Systems using traditional machine learning shaped everything from automatic ad buying to budget planning, targeting, click rate improvement, and more. By making smart moves as the space changes, brand marketers can lead the way forward in AI again.
Many of us use AI search without knowing it. Studies suggest that over 11% of Google searches show AI-created summaries. New answer machines like Perplexity handle 20 million questions daily through paid business products. Microsoft Copilot and ChatGPT search also grew, thanks partly to smart brand ads.
These changes have not gone unnoticed. During recent earnings calls, Google leaders praised their AI Overviews product. They said it makes users happier and brings in money at about the same rate as regular search results. Google really needs to succeed here, but it might face short-term problems.
People like AI because it gives answers faster than clicking around websites. This probably means fewer searches overall but perhaps from people more ready to buy. Experts at Gartner say normal search engine use will drop 25% by 2026. Questions remain about the best ad types and pricing for AI search.
AI answers take up space usually filled by ads on Google. This makes changes to ad placement almost certain, along with growing pains. Perplexity uses sponsored follow-up questions as ads, similar to native advertising. They charge per thousand views instead of per click. Microsoft tests different ad types with mixed results.
This year makes sense for big upfront ad spending. As users find answers faster through AI and cracks appear in normal search numbers, new formats and other media need to fill the gap. For many direct response advertisers, display ads come closest to replacing search ads.
Unfortunately, display ads face problems as fewer searches lead to less traffic for publishers. Some early signs suggest this might not happen evenly yet. Google and others add source links into AI answers. But the trend toward fewer or different searches hurts search-dependent sites that create lots of display ad space.
All this adds pressure to video, TV, and social media ads. Although video-on-demand prices may drop slightly next year, this might not last long. The fall of traditional SEO also drives up ad prices. Brands that depend on organic search see major traffic drops, creating holes only paid media can fill quickly.
As time passes, content creators must change how they market to AI agents and influence AI training data. Users expect immediate AI answers everywhere. Brand marketers face the challenge of meeting these higher expectations at every customer contact point. The opportunities vary by industry but exist for everyone.
Companies spend years building first-party data systems. They can use this foundation to improve AI models for many purposes and force important connections across their technology stack. Where AI lives determines how the whole system evolves. Brands can control more of this future or give power to big tech platforms.
Ten years ago, advertising led to early AI adoption. Systems using traditional machine learning shaped everything from automatic ad buying to budget planning, targeting, click rate improvement, and more. By making smart moves as the space changes, brand marketers can lead the way forward in AI again.
