Generative AI (genAI) will change the trajectory of search advertising—but not yet. In the meantime, retail media and social networks continue to attract consumers’ queries and marketers’ search budgets.

Key Question: How will search ad spending evolve to accommodate newer players and the coming disruption from genAI?

Retail Media Will Account for Most Search Ad Spending Growth by 2027 (incremental US search ad spending, by channel, 2023-2027)

Key Stat: Search formats on retail media will account for over half of all new search ad dollars this year. Just 1 in 5 will go to Google.

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Executive Summary
The search market is about to experience unprecedented disruption
Search ad spending growth will accelerate in 2024
Retail media will be the source of most search ad spending growth in the coming years

Competition around generative search is a slow burn
Google is in a more precarious position than ever as it defends its search business in court
Social platforms are honing their search chops to solidify their status as Gen Z’s Google
What will be top of mind for search advertisers in 2024?

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Retail Media Will Account for Most Search Ad Spending Growth by 2027 (incremental US search ad spending, by channel, 2023-2027)US Search Ad Spending, 2020-2027 (billions, % change, and % of total media ad spending)

Search Will Hold Its Own Against Display for the Foreseeable Future (% of total US digital ad spending, 2020-2027)Retail Media Will Play a Bigger Role in Search Than Display in 2024 (US ad spending, billions, by format and channel)

Despite Innovation in AI, Google Will Lose Search Market Share to Apple and Others (share of US nonretail search ad market, 2021 & 2025)Google Is the Default Search Engine for the Majority of US Internet Users Across Devices (US market share, by browser and mobile operating system, Oct 2023)

YouTube Hedges Out TikTok as Gen Z's Top Choice for Social Search (% of US Gen Z social search users, July 2023)

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Retail Media Will Account for Most Search Ad Spending Growth by 2027 (incremental US search ad spending, by channel, 2023-2027)

Search Ad Spending Forecast and Trends H2 2023

Retail Media Flourishes as Marketers Await Disruption From GenAI

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authors

Evelyn Mitchell-Wolf

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