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Follow incrementality as channels shift
Three ways search could go
There are several ways search could go. If a paid model like ChatGPT wins, with no ads next to the answers, search advertising could go away. If a free model like Gemini inside search wins, search advertising could grow tremendously, and a freemium mix with some paid and some ad-supported would land in between.
Both patterns already show up. A lot of ChatGPT users search far less than before, while many people using Google and Gemini are searching more and seeing more ads alongside.
Following the results
In any of those worlds, the thing to measure is the volume and incrementality that search delivers. Marketers already move budget between search and social, and between affiliates and retail ad networks, based on results, and the same logic points them to the places where the incremental results are.
How do marketers measure incrementality?
The standard method is a holdout test. A random group is shown no ads while a matched group sees them, and the difference in purchases between the two is the incremental effect. Meta calls its version of this a conversion lift study. The design is the same randomized trial used to test drugs.
Why is search advertising so valuable?
A search query states what someone wants at that moment, which makes an ad shown next to the results highly relevant. Google launched its AdWords advertising system in 2000. Alphabet's annual report for 2023 listed about $175 billion in revenue from Google Search and other ads.
How is Google changing search results with AI?
Google introduced AI Overviews in the United States in May 2024, placing a generated summary above the usual list of links. The feature grew out of the Search Generative Experience, a test that Google began in May 2023. Google said Gemini models power the summaries.
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