In the rough-and-tumble fight to win the generative AI arms race, Google is protecting its most precious asset: advertising. But the company is encountering some bumps in the road.
Google Announces a Shift
At its 2024 Marketing Live event, Google said that its search experience powered by generative AI, known as AI Overviews, will prioritize interactive shopping ads over organic search results. Doing so is supposed to create new opportunities for businesses by enhancing ad visibility and engagement.
Philipp Schindler, Google’s SVP & Chief Business Officer, highlighted the role of AI in driving content creation and advertising, indicating a strategic focus on maximizing reach and ROI for advertisers. Vidhya Srinivasan, VP/GM of Advertising at Google, also said that AI Overviews will present search and shopping ads matched not only to user queries but also to the context of the AI-generated content. This integration pushes organic search results further down, making ads more prominent and easier for users to engage with. She said,
You may have noticed that we already show ads above and below AI overviews. These ads are matched to the user’s search query. We will now start testing, Search and Shopping ads in AI overviews for users in the US.
From Google’s standpoint, the move signifies Google’s commitment to blending advanced AI capabilities with advertising. She shared the example of someone on Google searching for common travel hacks and having AI Overviews serve up products such as wrinkle release sprays to go along with the AI-generated summary of travel hacks. Users can then click on the ad and make a purchase without needing to do another search for things to buy.
Improving Advertising Effectiveness
The overarching theme from the event suggested that Google’s primary goal is to support advertisers in achieving greater reach and return on investment. Despite the sophisticated technology behind Google Search, the event underscored that the driving force behind these innovations is the enhancement of advertising effectiveness, potentially reshaping the landscape of digital marketing and search engine usage.
Google is typically more restrained and less transparent about its advertising-first focus, but not so this time. Why? Remember, Google is under a lot of pressure to catch up to OpenAI in generative AI and show that the company can protect its ad business at the same time. Google needs to demonstrate that by not sending searchers to a list of sponsored clicks as happens with Google Search, AI Overviews will remain valuable for advertisers.
Bad Optics for Google
This news is the latest development in Google’s controversial rollout of AI Overviews, formerly known as Search Generative Experience. As we reported last week, AI Overviews has caused a stir among businesses over concerns that search powered by generative AI will threaten publisher websites. Google’s open admission that AI Overviews prioritizes ads over organic content will only intensify those concerns.
In addition, recent news reports have called into question the reliability of AI Overviews. The chat experience has included wildly inaccurate and nonsensical responses to user queries. Google has taken a hit in public confidence with AI Overviews.
But Google is certainly not alone. Generative AI tools in general continue to commit mistakes and reveal bias, including ChatGPT. Google, though, has a large target on its back, given the company’s impact on search (which Google continues to dominate). The company can ill afford reports of more glaring errors surfacing in AI Overviews as its executives try to convince advertisers that AI Overviews will power the company’s future and theirs.
Moreover, Google has also taken some more positive steps to pressure publishers to improve organic content. The company’s March Core Update marked a significant step in the company’s fight against low-quality, SEO-driven content. By refining its algorithm, Google is placing greater emphasis on expertise, experience, authority, and trustworthiness, thereby promoting content that genuinely addresses human needs. This shift has reportedly led to a noticeable decline in search impressions for many publishers and brands, while favoring real-time, engaging content like that found on platforms like Reddit. While this update is just one step in a larger plan, it signifies a major change in how Google assesses and ranks content.
AI Overviews and Performance Max
AI Overviews is imperfect, obviously. But Google needs to embrace generative AI or be left behind by OpenAI and upstart competitor Perplexity while also carefully safeguarding its lucrative paid search business. While other companies are still exploring monetization options for their search products, Google has already introduced AI Overviews with Sponsored Ads, strategically developing both the product and revenue model in tandem.
The widespread rollout of AI Overviews suggests that Google is confident it won’t significantly harm its paid search revenue. In fact, Google’s data shared at Marketing Live indicates that AI Overviews actually enhance user engagement and satisfaction, leading to more valuable clicks for websites. This aligns with Google’s broader strategy to prioritize quality over quantity in organic search, benefiting users, Google, and potentially advertisers who offer a high-quality experience to visitors.
It’s also possible that AI Overviews might not noticeably affect paid search volume because they don’t necessarily decrease clicks on paid ads.
Now consider the potential integration of AI Overviews with Performance Max. Performance Max (PMAX) campaigns let advertisers create one campaign and have their ads shown wherever users are interacting with Google’s services, like Search, Display, YouTube, Maps, Discover, or Gmail. And Performance Max has grown more capable over time.
As Google moves towards providing more answers directly on search results pages, it may not want the industry overly focused on the proportion of traffic and performance attributed to paid search. This approach would give Google more breathing room and flexibility in ad placement without advertisers fretting about new AI features disrupting traffic patterns. As long as advertisers see predictable results and Google gets its cut, the specific ways AI features like Overviews change the search experience become less critical. Google’s already pushing in this direction by placing ads from existing campaigns automatically, whether advertisers like it or not.
The key point is that Google holds many cards. If the performance or revenue doesn’t meet expectations, it can easily change course.
What You Should Do
To adapt to Google’s increased use of AI Overviews, advertisers should consider the following steps:
Optimize for AI Overviews
Ensure that ads are tailored to be effective within AI-generated content contexts. This might include focusing on more visually engaging and interactive ad formats that can stand out in AI summaries.
Put Performance Max Campaigns to Work
Use Performance Max campaigns to maximize reach across Google’s various platforms. This approach will help ensure ads appear wherever users interact with Google’s services, enhancing visibility and engagement.
Focus on High-Quality, Relevant Ads
Given Google’s emphasis on prioritizing ads over organic content, advertisers should invest in creating high-quality ads that provide genuine value to users. This includes aligning ads closely with the context of AI-generated summaries to increase relevance and click-through rates.
Diversify Ad Spend
To mitigate risks associated with over-reliance on Google, advertisers should diversify their ad spend across multiple platforms, including social media, other search engines, and direct placements. This can help ensure stable traffic and leads.
Monitor and Adapt to AI Metrics
Use data and analytics to track the performance of ads within AI Overviews. Adjust ad strategies based on insights from engagement metrics, click-through rates, and conversion rates to continually optimize performance.
Invest in Visual and Interactive Content
With AI Overviews potentially prioritizing interactive shopping ads, investing in visually appealing and interactive content can capture user attention more effectively. This might include rich media, video ads, and shoppable content.
Enhance Ad Targeting and Personalization
Use advanced targeting and personalization techniques to ensure ads are highly relevant to the users’ search queries and AI-generated contexts. Personalized ads are more likely to engage users and drive conversions.
Think Quality, Not Quantity, with Organic Content
Ensure that your content demonstrates expertise, experience, authority, and trustworthiness. Highlight credentials, cite reliable sources, and ensure the content is well-researched and factually accurate. And regularly audit existing content to ensure it meets the new quality standards. Update or remove low-quality or outdated content.
Contact True Interactive
True Interactive can help you navigate paid and organic search. We know Google inside out and have deep experience in both areas. Learn about our capabilities on our website.
Lead image by Mohammed Nohassi via Unsplash
