ChatGPT and Generative AI in Search: The Biggest Digital Ad Format Is Ripe for Revolution
Microsoft and Google are racing to develop the best AI-assisted search experience, leaving advertisers on the precipice of major disruption in the largest and most mature digital advertising channel. But the only certainty is that disruption is coming, and quickly. Everything else—even the fate of the open web—is up in the air.
OpenAI's ChatGPT was an immediate success, gaining 1 million users within five days of its release, per data.ai (formerly App Annie). It was only a matter of time before Big Tech revved the AI growth engine. In February, Microsoft launched a chatbot-style interface run off OpenAI's GPT-4 large language model and called it the new Bing. Google, already defending its share of the search advertising market against Amazon and TikTok, rushed to compete.
More users are trying Bing thanks to its GPT-4 integration, but they haven't made a permanent switch. As the so-called AI arms race heats up, US site visit data from digital intelligence platform Similarweb reflects early changes in consumer behavior.
It's unclear how the market will support search ads in a conversational interface. Monetization of AI-assisted search answers isn't as straightforward as that of conventional search engine results pages. Right now, there are more questions than answers—and quite a few concerns.
AI-enabled search will likely reduce publisher site traffic, with major consequences for programmatic. Chatbot interfaces for search engines are designed to answer complex user queries that would usually result in the user clicking on one or more links. Smaller monetizable audiences would be a huge problem for publishers and advertisers alike.
Despite the hype, consumers are dubious about AI-assisted search. Almost half (49%) of US adults are interested in AIpowered online search, according to a February 2023 Morning Consult survey. But Ipsos found that only about a quarter (27%) trust search results generated by AI. There have been enough public blunders to justify any uneasiness.
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