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Google tweaks the business of clicks

In Technology
May 23, 2024

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The internet gatekeeper is selling a new key.

After organizing digital slices of the world’s knowledge and neatly presenting that information infused with advertising, Google (GOOG, GOOGL), the search world’s top dog, is staging its next act of transformation.

Powered, of course, by generative AI.

AI-generated answers to web searches stand to replace a flurry of clicks. Neat summaries and, eventually, distilled explanations of complex tasks as well as answers to multistep queries will come out the other end of a Google Search bar.

But the same AI-powered reinvention could upend the click-based, ad-supported business model that solidified Google’s dominant status in the first place.

The new format, with an AI overview followed by sponsored ads, effectively buries the 10 blue organic links that built Google’s business as well as the sponsored links that used to make up the bulk of Google’s search advertising.

“Not only is it unclear how ads will look and perform in the new layout, it’s a foregone conclusion that consumers will be less likely to click through to view source material,” said Evelyn Mitchell-Wolf, a senior analyst at eMarketer.

And why would you, with AI Overviews answering your queries and questions without even needing to touch the scroll key?

For years, Google has soft-launched its zero-click capabilities by slowly expanding its search modules with info boxes from Wikipedia, weather, maps, reviewed places, people, movies, and much more.

And now, with the AI-driven summarizations, users who previously might have been tempted to venture outside Google’s modules may end their search journey paying even less attention to a sponsored link.

On top of all this, measuring the effectiveness of an ad will also get trickier in a new paradigm of conversational search.

“Without clicks as a reliable signal, it’ll be hard to tell whether a consumer notices an ad, much less whether the ad influences a purchase decision,” Mitchell-Wolf said.

In space no one can hear you scream. And in an AI-powered conservational answer engine, no one can hear you click. Perhaps we may be telling our kids about “browsing” someday. And so marketers will have to resort to other forms of measurement.

But AI-powered search could also lead to new ways of making money from users and their attention.

And Google has an array of platforms to condition customers on new AI services, to test out how they perform, and to experiment with advertising formats.

Google insists that even as its search products evolve, the company will remain focused on sending valuable traffic to content creators and merchants, sharing the wealth, as it were.

Early findings shared by Google suggest that when people click on links from AI overviews, they are more likely to spend additional time on the site. Which may simply be cold comfort to businesses losing clicks.

The company does have incentives not to blow up the ad-supported search model. If fewer websites are able to publish high-quality content without dependable ad revenue, then the quality of Google search results will suffer.

But for individual websites and businesses that are reliant on Search, any change to how Google surfaces their content could be detrimental.

As Lily Ray, vice president of SEO strategy & research at Amsive, wrote in an analysis this week, Reddit (RDDT), Amazon (AMZN), and other major sites were among the SEO winners following Google’s March updates to Search. Google taketh away, but Google sometimes giveth.

For Google and its backers, the company isn’t jeopardizing its own search-world dominance, but attempting to justify it for a future where its most important product, and the notion of a web search, isn’t guaranteed.

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