The WARC Media team asked OpenAI’s ChatGPT tool for its suggestions about a new Global Ad Trends report on the future of search marketing.
Don’t worry, this won’t be another one of those oh-so-clever articles in which the author shares some wisdom or witticism, before – ta-dah! – revealing that the whole thing was actually the output of a generative AI chatbot.
No, I’ll get that confession out of the way early.
It seemed an obvious idea to take a closer look at search advertising for the next Global Ad Trends report. Already the largest channel by spend globally – commanding 28.3% of all ad investment worldwide in 2023, according to WARC Media forecasts – search media has been making the news all year, from headlines about AI innovation to reports of social platforms setting up search ad businesses.
But how to sum up these seemingly disparate trends into a single theme?
Enter our partner in crime, OpenAI’s ChatGPT. We asked the chatbot for its thoughts on a potential title. Most could be placed somewhere on a spectrum between anodyne and irrelevant (‘Search Marketing Trends Report’, for instance). One suggestion, however, caught the eye: ‘Search 3.0: The Future of Marketing in a Conversational Era’.
Let’s get meta
As others have observed, engaging with ChatGPT is a bit like talking to an overly confident 13-year-old, armed to the teeth with facts it has just learned, but entirely willing to cut corners through a generous scattering of outright fabrication.
It got us thinking: what impact does ChatGPT believe it might have on the search landscape? The chatbot’s response was surprisingly diplomatic. It views itself as “complementary” rather than “competitive” to traditional search, given it may be able to offer greater context through natural language processing.
Nevertheless, ChatGPT does see itself as part of a third wave of innovation in online search – hence the ‘Search 3.0’ title.
If the first generation of search technology relied on keyword-based search and matching, and search 2.0 saw the introduction of advanced algorithms for ranking and relevance, then ChatGPT argues search 3.0 builds on these previous stages by incorporating technologies such as AI and natural language processing.
“With these advances, search is becoming more conversational and interactive, and marketers are shifting from targeting keywords to targeting intent and context. This new era of search has the potential to transform the way we discover and interact with information, products, and services online, and represents a significant shift in the marketing landscape,” it wrote.
Fragmentation comes to search
While media consumption has splintered across online and offline channels and platforms, search is an outlier, in which market leaders (Baidu in China, Google everywhere else) hold a mostly-unchallenged monopoly.
Google’s share of the $250bn-plus global traditional search market has remained steady at around the two-thirds mark; it is forecast to earn $176.4bn in ad revenue in 2023, according to WARC Media – more than Meta, TikTok, Twitter, Snap and Pinterest combined.
However, as consumers pivot away from text-based search towards discovery on social and retail platforms, and generative AI reinvents the search experience, Google’s long-standing market dominance may come under unprecedented pressure.
Microsoft CEO Satya Nadella has been talking up the prospect of winning search ad dollars from Google. While Bing is only forecast to earn a 5.2% share of the global search market in 2023, each additional 1% share gained through the integration of ChatGPT into Bing could earn the company an additional $2.5bn in revenue.
Retail media may have an even larger impact. Sponsored Brands accounted for the majority (78%) of Amazon’s ad revenue last year, according to data from Perpetua and Tinuiti – and WARC Media believes keyword search accounts for a similar share of spend across other retail media platforms, and at a similar cost. We calculate that the ‘total search’ market may be worth as much as $350.4bn in 2023, of which over a quarter (26.8%) will be from retail media.
So far, retail media investment appears to be incremental to existing search ad spend, with brands focusing on converting shoppers at the point of purchase. However, as retail media networks continue to proliferate – and costs rise – marketers may be forced to make trade-offs on where that search spend goes.
Google remains in a strong position. Parent company Alphabet is building its own language model, LaMDA, and will undoubtedly challenge Bing with its own chatbot tool, Bard – despite the embarrassment of its rushed release.
Yet, for all the nagging sense one is dealing with a precocious but slapdash teenager when speaking with ChatGPT, it does feel as though this is the end of an era – and that the future of search may look very different to the steadfast market we’ve come to know over the last two decades.