Search Ad Spending Forecast and Trends H1 2023

ChatGPT and Social Search Will Disrupt Market Dynamics

Report by Evelyn Mitchell  | May 15, 2023
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Report Snapshot
This year, advertisers will grow their search investments slower than they have in more than a decade.
Search’s share of digital ad dollars will inch downward.
Growth in search ad spending is driven by RMNs—not traditional search engines.
Apple and Microsoft are encroaching further onto Google’s turf.
Google’s search ad revenues are slowing to a crawl as it faces stiff competition for tighter budgets.
TikTok and Instagram are gaining momentum as search touchpoints with consumers and advertisers.
How can advertisers stay ahead of the curve in search?
Insider Intelligence Interviews
Sources
Media Gallery
About This Report
Generative AI is poised to reshape the search advertising market. With a significant first-mover advantage, will Microsoft grow its share of search ad budgets? How can advertisers stay ahead of the curve?
Topics
Search Ad Spending
United States
Table of Contents
Report Snapshot
This year, advertisers will grow their search investments slower than they have in more than a decade.
Search’s share of digital ad dollars will inch downward.
Growth in search ad spending is driven by RMNs—not traditional search engines.
Apple and Microsoft are encroaching further onto Google’s turf.
Google’s search ad revenues are slowing to a crawl as it faces stiff competition for tighter budgets.
TikTok and Instagram are gaining momentum as search touchpoints with consumers and advertisers.
How can advertisers stay ahead of the curve in search?
Insider Intelligence Interviews
Sources
Media Gallery

Report Snapshot

In the span of about six months, generative AI has burst onto the scene just as Google’s growth has started to plateau. With retail media and social networks also competing for search advertising dollars, brands face a more diverse search landscape than ever before.

Key Question: Which players will see the biggest gains in search ad spending over the next few years?

US Nonretail Search Advertising Market Share, by Company, 2018-2025 (% of total nonretail search ad revenues)
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KEY STAT: Microsoft’s US search ad revenues will grow more than three times as fast as Google’s this year, and by 2025, Microsoft’s share of the nonretail search ad market will be nearly 9%.

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    Table of Contents

    1. Report Snapshot
    2. This year, advertisers will grow their search investments slower than they have in more than a decade.
    3. Search’s share of digital ad dollars will inch downward.
    4. Growth in search ad spending is driven by RMNs—not traditional search engines.
    1. Apple and Microsoft are encroaching further onto Google’s turf.
    2. Google’s search ad revenues are slowing to a crawl as it faces stiff competition for tighter budgets.
    3. TikTok and Instagram are gaining momentum as search touchpoints with consumers and advertisers.
    4. How can advertisers stay ahead of the curve in search?
    1. Insider Intelligence Interviews
    2. Sources
    3. Media Gallery

    Charts in This Report

    US Nonretail Search Advertising Market Share, by Company, 2018-2025 (% of total nonretail search ad revenues)US Search Ad Spending, 2020-2027 (billions, % change, and % of total media ad spending)
    US Digital Ad Spending Share, by Format, 2020-2027 (% of total digital ad spending)Growth in US Search Ad Spending, Retail Media vs. Non-Retail Media (TEST), 2020-2027 (% change)
    US Google Search Net Ad Revenues, 2020-2025 (billions, % change, and % of total Google ad revenues)Where US Consumers Start Their Search When Online Shopping, Q1 2022 & Q1 2023 (% of respondents)

    Interviewed for This Report

    Michael Cohen
    Horizon Media
    Executive Vice President, Performance Media
    Interviewed April 13, 2023
    Katie Driggs
    FerebeeLane
    Director, Media
    Interviewed April 12, 2023
    Aaron Levy
    Tinuiti
    Vice President, Paid Search
    Interviewed April 10, 2023

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    authors

    Evelyn Mitchell

    Contributors

    Chris Keating
    Director, Research
    Jennifer Merritt
    Vice President, Content
    Peter Newman
    Senior Forecasting Analyst
    Tracy Tang
    Senior Researcher
    Paul Verna
    Principal Analyst

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