As Google strives to be at the forefront of artificial intelligence, it must ensure that this technology does not impede its highly profitable advertising machine.
The major web company is experimenting with advertisements within its latest AI Mode for online searches, a tactical step aimed at countering rivalry from ChatGPT while reshaping its ad operations for the era of artificial intelligence.
“Undoubtedly, AI is increasingly being used as a go-to resource for information,” remarked Roger Beharry Lall, the research director at IDC focusing on advertising and marketing technology, to newsinpo.site.
This will inevitably lead to a change in how searches are conducted and in the chances to promote a brand.
The integration of advertising has been a key question accompanying the rise of generative AI chatbots, which have largely avoided interrupting the user experience with marketing messages.
Nevertheless, advertising continues to be the backbone of Google’s finances, making up over two-thirds of its income.
“Google definitely needs to figure out how to generate revenue from AI-powered searches similar to how it has done so with previous iterations of its search engine,”Techsponential analyst Avi Greengart stated during the tech company’s yearly developers conference earlier this week.
– AI-fueled ads –
A new AI Mode enables conversational interaction with Google during search queries, providing answers in diverse formats, such as video, audio or graphs.
The large online platform mentioned they are currently testing the inclusion of advertisements within AI Mode replies. This move builds upon the knowledge obtained from AI-created summaries, also known as “Overviews,” which were added to search outcomes about one year ago.
These Overviews present detailed AI-created summaries of findings above conventional website links and advertisements.
“The future of ad-driven commerce powered by AI isn’t approaching; it’s already arrived,” declared Vidhya Srinivasan, who serves as the vice president of Ads & Commerce at Google.
“We’re reimagining the future of ads and shopping: Ads that don’t interrupt, but help customers discover a product or service.”
Google is expanding ad placements within AI Overviews to desktop devices in the United States, building on the success of their mobile rollouts.
According to the firm, over 1.5 billion users view AI Overviews each month.
Beharry Lall remarked that Google is performing admirably in terms of adaptation.
At present, the strategy is to experiment and build momentum, much like they have done.
Google’s strong advancement into generative AI escalates its rivalry with OpenAI’s ChatGTP, which has integrated search engine features into its widely used chatbot.
– AI ad tools too –
Google announced it is making AI tools available to streamline the creation of online ads, mirroring similar initiatives by Facebook-owner Meta, Google’s primary rival in online advertising.
New features, available in the United States, will enable merchants to leverage AI for effective marketing campaigns and to “power an algorithm capable of targeting new searches and generating additional conversions,” Google said.
“AI helps a lot in advertising as far as targeting customers more precisely,” Creative Strategies analyst Carolina Milanesi told newsinpo.site.
Google should have opportunities to charge for AI tools for ad campaigns, and even for insights from data the tech firm has about its users’ lives.
“As AI agents handle tasks for you, these agents will require data,” Milanesi stated.
In order to obtain access to that information, you’ll need to make a payment.
For instance, Google could find valuable information for ad targeting from the types of restaurants or locations an individual has looked up online, as per her statement.
Generating income through AI tools and data might assist Google in broadening its revenue streams as its advertising sector faces scrutiny from regulators, says Milanesi.
“New business models might emerge regarding how a brand integrates with those AI outcomes,” stated Beharry Lall.
Ultimately, this will add value and prove advantageous for Google.
The challenge of how Google and other platforms can clearly distinguish between paid messages and organic results produced by AI “will be the \$64 million question,” according to Beharry Lall.
“The responsibility will fall to regulatory agencies to create guidelines,” the analyst stated.
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