How Will Generative AI Search Impact PPC?

Artificial intelligence (AI) is a broad technical term that includes machine learning, algorithms that can process data, and generative AI such as large language models (LLMs) that can hold human-like conversations. Companies such as OpenAI, Microsoft, and Google, are advancing AI technology that will change the world. Some of these advancements in technology will affect the way we use the internet. With these changes will come new methods of reaching consumers and serving them relevant ads that will entice them to click. For that, advertisers will need to revolutionize their campaigns, including pay-per-click (PPC) marketing to engage with users where they can be found, including on new search platforms or still on the old search engines that are being used in new ways. 

Steady technical advancements are changing the world day by day. Companies such as OpenAI and others have introduced their AI products such as LLMs that power the ChatGPT chatbot. The LLMs can generate text, images, and code, search the internet, and analyze data, images, and files. Users can hold conversations with this chatbot and seek solutions and answers on those chatbot interfaces in conversational mode the way most people to date would use a search engine. 

Gartner predicts search volumes will decrease 25% by 2026 due to the rise of generative AI. If users feel AI agents like chatbots and generative AI search results answer their search queries faster and that the experience is easier and more predictable, then many people will opt for these services over traditional search engines like Google. But Google is developing plans to stem the tide of decreasing search traffic by adding their flavor of AI search that they’ve named Search Generative Experience, or SGE for short.

Understanding How SGE Works

Generative search works similarly to how LLMs such as ChatGPT and Google’s chatbot Gemini work. A user queries the AI just like a regular Google search. Search algorithms and sophisticated programming will find the most appropriate answer and respond to the user in a conversational tone, providing a summary snapshot for the answer that could include text, images, and links. 

Instead of using a dedicated app or user interface to interact with the chatbot, the user would search their query on a typical search engine interface either on desktop or mobile. The user’s search experience will differ from a traditional web search in that they will receive only one answer which was generated by a computer, rather than receiving a curated list of sites that may answer the question.

Google generative AI search combines the science of AI with its search engine product with a focus on providing a premium user experience. Generative search works by sending the user’s query to software, which includes search algorithms and Google’s LLMs called MUM and PaLM2,  that quickly forms an answer and responds conversationally. These LLMs have powered Google’s chatbot Bard, a conversational AI chatbot similar to ChatGPT.

AI Google search allows users to:

  • Search for answers to complex questions
  • Find their answers quicker with an AI-powered snapshot
  • Get up-to-date product information based on Google’s shopping datasets
  • Easily ask follow-up questions and converse with the chatbot about the search results
  • Select generated “people also ask” questions
  • Receive AI-generated responses in text or images
  • Get links in the answer for further exploration

New generative AI is sure to change the search landscape and will likely continue to develop and advance. 

Exploring the Limitations and Challenges of SGE

Despite the technical marvels of generative AI, it is not without its risks and limitations. For example, AI chatbots have been known to hallucinate answers, which means they may generate an inaccurate response that they confidently pass off as true. Other limitations include potential bias, misinterpretations, opinionated responses, and the AI-generated snapshot contradicting existing search results that appear on the same page.

Google uses its Search quality systems, including core ranking systems, and has trained the LLMs to restrict its answers to search engine results that have been corroborated as factual to mitigate these risks and provide reliable, helpful, and high-quality search results. Google has also trained the LLMs with human input as part of its quality control. 

Compliance will remain an issue for advertisers taking advantage of new technology. Advertisers showing Google ads on generative AI searches will continue to operate under industry standards and regulations. 

8 Ways Search Generative Experience Will Affect PPC Marketing

What does all this mean for advertising and PPC marketing? There are at least eight ways that SGE will have a potential impact on PPC marketing. You can expect the following changes to occur and can develop plans to appropriately adapt to the changes. 

1. Shift in Search Behavior and Ad Placements

Conversational searches will be inherently different than traditional search engine queries. Because of this, user behavior in general may start to evolve and advertisers should take note to adapt to these changes. Users may click on traditional ads less if they are getting the answers they are looking for in the AI snapshot. Ad placements may feature less prominently as the snapshot, which takes up substantial space, will be the first thing users see. 

2. Changes in Keyword Research and Ad Writing

Google’s AI responses may dominate the basic queries that users have, with generated responses likely to answer common or simple questions. Where it may not perform as well could be in answering complex questions and highly specific queries, questions that the AI may not have seen in its training. This could mean the return of the importance of long-tail keywords to show ads that solve problems that AI cannot solve. As for the text content of the ads, you may need to write more human and more eye-catching ad copy to differentiate from the AI and attract your target audience.

3. Increased Popularity of Display and Video Ads

Search results have trended away from text only in the early days of Google and other search engines, to a dynamic mix of relevant images, video clips from sites like Google’s YouTube platform, and shopping ads. Google’s AI-generated snapshots also include a multi-media mixture of elements, including text, links, and images. This means that display ads and video ads may entice users more and more and users may be less likely to interact with text-only ads moving forward. 

4. Focus on Metrics Like CPA and ROAS Instead of CTR

With AI-generated responses likely to take up so much of the search results page that users will see, PPC ads may be less effective at grabbing a user’s attention and getting them to click. Click-through rates (CTR) may suffer as a result, at least in the beginning phases of new features such as SGE. It might make sense to instead focus on the bigger picture and the return on ad spend (ROAS) and cost per acquisition (CPA), the metrics of the success of the campaign, and the actual costs of acquiring a paying customer, respectively.

5. Reduction in Organic Results and Increased PPC Competition

Organic results, which can be achieved through search engine optimization (SEO) may appear less prominently and may be less important to brands and advertisers following recent changes such as Google’s algorithm updates and the introduction to GSE. This may mean that advertisers will fight over prominent ad placements for their PPC ads to catch the eyes of users who look past the AI-generated snapshot. 

6. Lack of Reporting Segmentation in Ad Placement

As AI responses will likely dominate the prime real estate in search results that advertisers would prefer to use and generative responses appear more prominently or even more seamlessly integrated into regular search results, advertisers may find it difficult to gauge how prominently their ads are being displayed in the mix. Reporting segmentation on placement, such as the top of the page, the bottom of the page, or the sidebar, may become less clear in terms of how well the ads are doing in comparison with AI responses as AI-generated results may take up more space. Overall, it may become less clear if ads are performing poorly because of ad placement or other factors such as competition with new prominently displayed or integrated AI responses. 

7. Increased Collaboration Between PPC and SEO

The search experience will evolve as users adapt to new developments and Google fine-tunes its products to the public’s reception of new AI features. Many users may prefer to use generative AI to find solutions to their searches. That doesn’t mean that organic search results are going away. SEO can remain a powerful tool, particularly for the more entrenched market players as Google features more authoritative sources higher in the results. Use your analytics from PPC campaigns to help with your SEO endeavors. Successful keywords from the PPC campaign, for example, can then be used for SEO keywords. 

8. Rise of Microsoft Bing’s Popularity for Ads

As a relative latecomer to the AI hype, Google has had to play catch-up to compete with products such as ChatGPT and Microsoft Bing’s Copilot to try and adapt its search product, which is integral to its business as a whole. But if users continue to become comfortable with more established generative search experiences on other services to the new experience provided by Google, competitors like Bing may become an increasingly attractive choice for PPC ads. 

How Can Advertisers Prepare for the New PPC Landscape?

Advertisers would be wise to stay on top of the ever-changing digital landscape, including steady technological progress and advancements. Consider these five tips to stay ahead of the curve, beat the competition, and develop marketing strategies that align with technical advancements.

Combine PPC With a Comprehensive Marketing Strategy

A comprehensive marketing strategy should include not only PPC campaigns but a broad spectrum of marketing, including AI-powered programmatic advertising and other forms of advertising. 

Include in your strategy optimized marketing techniques such as:

  • Define your goals for the overall campaign such as boosting brand awareness or increasing leads.
  • Understand your audience and their pain points to tailor your PPC campaigns. 
  • Concentrate only on high-performing keywords.
  • Re-evaluate your bidding strategy to align with your overall marketing goals.
  • Optimize your landing pages for conversions.
  • Implement conversion tracking to see what your customers do after interacting with an ad.
  • Fine-tune your search ads by enabling sitelink extensions.
  • Revisit your ad copy to keep it relevant, fresh, and ensure that it resonates with your target audience to offer solutions.
  • Monitor the performance of your search advertising campaigns and use Google Analytics to fix problems and optimize your ads for performance.
  • Use Performance Max campaigns to access all of your Google ad inventory in one place.
  • Evaluate your key performance indicators (KPIs) and see which areas need improvement.
  • Use insights gained from your content marketing to see which high-performing elements you can add to your PPC campaign.
  • Use responsive search ads to adapt to your brand’s customers and serve them the most relevant ads.

Consider a Feed-Based Approach to User Queries

Consumers often use search engines to find product information, which they may eventually purchase after following through on a relevant ad. One issue advertisers may have is that products are constantly changing, including product price, product styles, names, or available inventory. If advertisers write ad copy based on products with out-of-date information, users may not click the ad or may not be able to purchase the product they were looking for.

Feed-based ads are text ads that you can use to dynamically show up-to-date ad content based on current product information. Feed files are data files that brands and retailers provide to search engines like Google that show up-to-date information on their products, including descriptions, prices, and inventory levels. Feed-based text ads can complement Google Shopping Ads and you can be sure they will show the same current information such as sales price or availability. 

Since users may click on traditional less as Google moves forward with putting generative AI responses to search results, it is essential to show current information in your ads to entice users to click. 

To adapt to the changing landscape, you will need to create more engaging and relevant ads. Your ads will need to resonate with your target audience more than ever if you expect them to click your ads rather than take Google’s AI-generated word for the search result they sought. This means staying current with trends as they happen and making sure your eye-catching ads appear prominently to pull the users in with engaging and relevant content. 

To be sure you are staying on top of trends, you can use cutting-edge tools and software just as sophisticated as the tech giants. AI-powered analytics and machine learning can provide you with insights into trends, consumer behaviors, and market changes as they happen. Dynamic creative optimization (DCO) technology, for example, can optimize personalized ads based on real-time data. DCO can use the power of AI and data processing to create multiple iterations of the same creative based on context, audience, and past performance.

Focus on Brand Awareness Campaigns

Just because technology is changing the world at rapid speeds, compelling advertisers to keep up with vast technological leaps and the ever-changing market doesn’t mean you should forego basic marketing principles. These tried-and-true techniques will remain relevant no matter how often technology and platforms on the internet change. 

The technical aspects of reaching leads may evolve but how you engage them and convert them remains the same. For that reason, you should focus on brand awareness and keeping the brands in the forefront of the minds of your consumers. People may be using technology differently but they still want to see their beloved brands wherever they go and however they use the new technology.

Keep Abreast of the Latest Developments

AI developments are happening at a dizzying speed, with new products and services being offered all the time. Generative AI text quickly led to generative images, generative AI music, and now even generative AI videos, all of which can be used in advertising. The industry of advertising will need to adapt to these developments. 

In addition to generative AI search, the future of advertising may include:

  • Predictive analytics
  • AI content creation
  • Virtual reality (VR) ads 
  • Augmented reality (AR) ads

Beyond those advertising elements that rely on AI and cutting-edge software and algorithms, new emergent technologies will be developed that we can’t yet imagine. So much is happening in the tech world involving new AI products and features that it may be tough to keep track of developments. Also, Google may fine-tune and change the AI conversational experience as it responds to feedback and its own analytics. It is vital that advertisers stay abreast of not only emerging technologies but also trends and changes in the market and how consumers use technology for optimal campaign results.

Embrace the Future of PPC Advertising With AUDIENCEX

Google SGE is changing the search engine experience with generative search. As more users change their search habits and use the internet in different ways, advertisers will need to change the ways they connect with these users. Luckily, new technologies are always emerging that can help advertisers engage with these users like never before. With the latest in adtech and custom algorithms, advertisers can achieve higher conversion rates and ultimately better campaign performance. We can provide the expertise and support that you need to drive performance in PPC advertising, programmatic, CTV, social and more – throughout the entire omnichannel landscape.

As an AI-enabled digital advertising partner, AUDIENCEX is particularly well-suited to help you stay on top of AI advancements and provide strategic solutions on all things AI, while providing the human expertise needed to effectively leverage these tools to their full potential. Whatever the future of AI holds and through any developing technologies that affect the advertising industry, the team at AUDIENCEX is dedicated to staying on top of emergent solutions, testing and integrating them into our robust tech stack, and enabling brands and agencies alike to stay ahead of the curve and meet the future head-on. Contact us today to connect with an expert who can help you update your strategies for our constantly evolving landscape.