@tjrobertson52

It's official. Google has started showing ads in their AI results. I'm talking about Google's AI Mode, which will probably eventually replace their traditional search results page.

I wanna talk about how everyone who's been paying attention knew this was coming and why it's actually the best case scenario. So if you don't know, Google makes the vast majority of their money through Google ads. Over the last year or so, it's been funny to hear people speculate about how Google's gonna make money with AI, since it's pulling so many people away from traditional search.

A lot of people have speculated that they won't be able to replace traditional search results with AI results because it would result in fewer ad clicks. Now I actually think they'll make more money from ads by replacing traditional search results with an AI response. But even if that wasn't the case, it was never really an option for Google to just keep the traditional search results as AI gets better.

AI results are just going to be better than traditional search results now. You can debate about whether that's happened yet, but it's gonna happen eventually. If Google doesn't replace their own traditional search results, one of their competitors like ChatGPT will.

Other people have speculated that maybe Google won't show ads in their AI mode and they'll just go to a subscription model like ChatGPT, but anyone who's actually managed Google Ads campaigns knows that would never work. When you click on a Google ad, Google makes between пї 25 and $25 for each of those clicks. In rare cases, they're making over $100 from a single click.

And you might think but no one clicks on ads. Actually, upwards of 10% of clicks are going to ads. There is no subscription Google could offer that would generate anywhere close to the amount of revenue they generate.

Add clicks. So it always had to be ads inside the AI response. The reason I say this is the best case scenario it's cause as of right now, the ads are clearly marked as ads separate from the rest of the AI response.

The worst case scenario would be if brands could pay Google to be recommended by the AI response without a clear sponsored label. Now if Google did that right now, I think the backlash would be too huge for it to make sense. However, as I pointed out in a previous video, Google now has the lead and they're also progressing quicker than any of their competitors.

There is a possible future where we all become so dependent on Google's AI that they could do something like allowing brands to purchase influence within the AI response. Now I still think that's very unlikely, but I do think we should all be happy to see clearly labelled ads within Google's AI responses. I also think there's a chance that this could revitalize Google Ads.

Anyone who's been running Google Ads has probably seen a decline in performance over the last few years. I think this is primarily due to an increase in competition. More and more people are putting more and more of their budget into Google Ads.

These new ads appearing in AI mode could be highly targeted and therefore highly effective. We'll have to wait and see how it plays out, but we could have a second golden era for Google ads.