When chatbots are the new Google, where will all the ad spend go?

When ChatGPT first came out, I organized a family road trip from Portugal’s capital of Lisbon to Andalusia in Spain. Except, it wouldn’t be fair to say “I” organized it; ChatGPT did most of the work. A process that could take me days of research was cut to a couple of “chats” on my phone. All I had to do was check that its recommendations aligned with my tastes (and double-check they were legitimate suggestions), then make the relevant bookings.

Every day, millions of people have a similar experience, where the number of “hops” to complete a task has been reduced by LLMs.

Already, the rise of AI Overviews had caused much handwringing, along with anecdotal evidence of loss of attention and traffic flowing to websites. With the launch of Google’s AI Mode, Gemini in Chrome, and confirmation of plans to serve ads inside the bots, these concerns have only grown more pronounced.

The likely dawning reality is that the digital ad industry is entering a new normal that will be a far cry from the business as conceived during the Web 2.0 era. As search habits and user traffic patterns rapidly adjust, advertisers are already looking at what this means for the way budgets are allocated in the coming age.

The good news? There are plenty of channels that cater to advertisers seeking attention, and they deliver growth.

Where will search and website advertising spend go instead?

As advertisers consider where to spread their budgets, the main priority will be harnessing channels that can deliver strong, trackable ROI. That includes accountability, covering the provision of clear campaign metrics, brand safety controls, and robust data governance, the ability to hook attention and prompt desired responses from consumers, and growth in its simplest form: Are there more people interacting with this channel than before?

Three channels that meet these criteria are CTV, DOOH, and in-app advertising.

These channels offer highly controlled, high-quality environments with content and audiences that are all vetted to some degree. CTV and in-app come with authenticated sign-ins and consent from the user, while DOOH is naturally only seen by real humans.

Because each of these emerging channels’ respective platforms police the content they host, brands wouldn’t have to worry about their spend going to fraudulent, made-for-advertising sites or their creative appearing next to offensive material. They offer all the advantages of digital advertising — programmatic trading, performance metrics, and audience targeting — without the risk.

Shaping the future of online interaction

Much is unknown about how AI will affect our lives, but tech giants aren't wrong to bank on LLMs becoming the preference of most people’s information journeys. The user experience is just that good. There will come a day when search engines are a distant second place (or even third, if we consider social media too) in how people explore the web.

The ability to ask a question in natural language and receive an immediate response is convenient and intuitive in a way that legacy search and pages of SEO-optimized content never were. LLMs are an imperfect information tool, but so are search engines when you consider that finding a recipe means scrolling through text inserted purely to appease an algorithm.

This will have a profound impact on the allocation of advertising budgets. Ad spend will, of course, continue to be allocated to the broader search space, including Google’s AI Mode and the Perplexity platform (which started testing ads last year). But with traditional search no longer dominating user journeys as it once did, and AI chat ad dynamics still being hammered out, an investment rejig feels inevitable. We will very likely soon see advertisers diverting a greater slice of their spend towards other environments that they feel can offer the solid impact they want now.

CTV, DOOH, and in-app advertising are all growing in prevalence and influence and will remain relevant, even after LLMs become the front end of the internet. While people are still going to watch shows and movies, use apps, and see billboards, the days of “Google” being the common verb for finding information online may well be coming to an end.

This op-ed represents the views and opinions of the author and not of The Current, a division of The Trade Desk, or The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk.