Spending on AI-driven search advertising in the U.S. is forecasted to rise dramatically, from over $1 billion in 2023 to nearly $26 billion by 2029. This surge is attributed to rapid technology adoption and enhanced user targeting capabilities. As AI search ads gain traction, traditional keyword-based ads risk losing revenue, prompting companies like Chegg to adjust business models accordingly. Major players like Google and Microsoft are integrating AI to compete with chatbots. Publishers are turning to subscriptions to address reduced traffic caused by AI search.
Companies that rely on traditional keyword-based search ads could experience revenue declines due to the growing popularity of AI search ads.
AI search ad spending is expected to constitute nearly 1% of total search ad spending this year and 13.6% by 2029 in the U.S.
Publishers and other sites are feeling the pain from AI search. As they lose out on traffic, we're seeing publishers lean into subscriptions.
Companies in sectors like financial services and healthcare are embracing AI to enhance their ad strategies, confirming its significance in the evolving landscape.
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