Data & Tech

What search advertisers think about Google’s AI-infused search

“The new question is, what will it take to be the answer to these new queries?” one agency exec said.
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Morning Brew

5 min read

In early May, Google confirmed what many had been anticipating: The humble search engine would get a facelift featuring generative AI. If Google and other search engines like Bing have their way, search will soon be more conversational, offering detailed and hopefully human-sounding suggestions—or at least as human-sounding as we’d expect from a generative AI tool.

At the company’s I/O conference where the announcement was made, Google VP of Engineering Cathy Edwards showed off the update, peppering the search bar with questions like “What’s better for a family with kids under three with a dog, Bryce Canyon or Arches National Park?” and ebikes in red for a 5-mile commute with hills.”

The company is betting on  generative AI as the future of search. What’s next for search advertisers, though, is still a little unclear. Last week, Google shared how the company might fit ads into the new search experience. For the most part, generative search’s ad experience—which executives have said are “experiments within an experiment” for now—looks a lot like, well, the old search ad experience.

With that said, search advertisers told Marketing Brew they expect consumer behavior to change, shifting from broad commands (“dinner Brooklyn Thai”) to something more conversational (“Where can I get the best Thai food in Brooklyn?”). That anticipated shift means advertisers are rethinking their search strategies to jockey for prime spots alongside generative AI’s replies.

“For brands, the new question is, what will it take to be the answer to these new queries?” Nirish Parsad, practice lead, emerging tech at the performance marketing agency Tinuiti, said.

Search party

To state the obvious, search makes a lot of money for Google. The company’s “search and other” category pulled in nearly $40 billion last quarter, and its search engine dominates market share in the US at 91%, according to SimilarWeb. That dominance faced a challenge for the first time in decades when Microsoft announced an investment in ChatGPT maker OpenAI that saw its Bing search engine infused with generative AI. Bing has also begun to run ads in generative AI search results, although searches Marketing Brew made with Bing’s AI chatbot this week returned zero ads.

Changes to search aren’t new, even if most people don’t notice. Buying search ads used to involve writing out scores of keywords with the hope that ads would reach the right people, even if someone misspelled a search. Today, while most advertisers still bid on specific keywords through online auctions, Google uses AI to match the right searches with the right ads, Karen Works, director of search at the agency RPA, explained.

The new generative AI beta test is more of an aesthetic improvement aimed at making search look more “glitzy,” she said. “What they have works—they’re just trying to make it look like a TikTok or something,” she told Marketing Brew. “I want other people to test it, not necessarily me.”

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In a blog post that followed Google’s announcement, Jerry Dischler, Google VP and GM of ads, wrote that in the coming months, the company plans to test search ads directly integrated within Google Search's “AI snapshot,” as well as its chatbot. An example Google shared showed a search for “hiking backpacks for kids,” which returned results for three different backpacks, the top of which was sponsored.




But shopping queries are pretty specific, and it’s still unclear what exactly other more conversational queries could return. Will suggestions for dinner places return a sponsored search result for Applebees? And how casual might it sound coming from a chatbot?

“Slotting ads into a conversation is bizarre,” Aaron Levy, VP of paid search at Tinuiti, said.

Another question for search advertisers is ad load—aka how many ads users actually see—something Google has long tinkered with, Amanda Walls, founder of the agency Cedarwood Digital, said.

“If we continue to have a number of ads above the chatbot, I don’t think we’re going to see a huge difference” in effectiveness, she said.

And while generative AI can occasionally correctly answer questions like “Who was the first king of England?” (King Athelstan, who took the throne in 927, according to Bing’s chatbot), it might struggle with more service-related searches, Walls said. She was right: When asked who the best lawyer in southern Delaware was, Bing apologized, saying it could not provide a definite answer— before sharing a similar list that may have resulted from an average, run-of-the-mill search engine.

“Commerce-driven queries are pretty easy,” Levy said. “For more complex queries, like B2B, informational-driven queries, I can’t see an area where they would fit a conversation in there, period. So I wouldn’t be surprised if they keep things somewhat as is.”

Other potential short-term effects include a potential drop in site traffic, if and when Google’s AI-powered search is rolled out more broadly, Mohammad Haque, VP director of paid search at Mediahub, explained. If generative AI can spit out an answer, users might not click through to a website.“People typically don’t scroll down,” he said.

Walls said she was hoping that doesn’t become the case, and that, from what she’s seen, most people still want to “look around” the search results.

“If there’s a massive drop-off in our clicks, then there’s a massive drop-off in their revenue, and logic kind of dictates to me that that wouldn’t be an ideal situation for either party,” she said.

For now, clients are asking the agency Tinuiti what to do, or whether the sky is falling. Parsad’s advice is to get their houses in order.

“Your reviews matter...How people talk about you matters, reputation matters,” he said. “We’re gonna have to make sure that the brands are buttoned up in this area, so that they can be the answer.”

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