What generative AI means for Google as a search engine

Microsoft’s multibillion-dollar investment in OpenAI has put its name well and truly back on the map making it the latest digital revolution. The adoption of ChatGPT — estimated to have hit 100 million users in January this year — has also seemingly given Microsoft control of the industry narrative, and earlier this week it debuted a chat API offering an ad monetization tool for third-party publishers. 

But where does that leave the iconic search engine, Google? It is attempting to enter the world of generative AI via Bing’s chat API preempting a period of launches and pitches by industry incumbent Google, which will follow up this week’s developer conference Google I/O with its YouTube upfront (dubbed Brandcast) and Google Marketing Live in the coming weeks.

It was at Google I/O where the online behemoth showcased its Search Labs experimentations, culminating in its Search Generative Experience, or “SGE,” which seeks to emulate the recent success of the Microsoft camp by similarly using a chat interface. Essentially, SGE will enable Google users to quickly get the lay of the land on a topic by asking follow-up questions via AI-powered search returns. And, most importantly for marketers, SGE will also feature promotional space with dedicated ad slots available throughout the page, which are still being tested, that will be denoted from organic search returns via a “sponsored” label.  

While much public speculation seems to centre upon the prospect of the likes of ChatGPT leading to challengers unseating Google’s control of the online advertising market, many are equally bullish on Google’s ability to move with the times. As for now, Google has a defendable moat in search, as chatbot features don’t outperform the current search engine experience in all verticals. Although, it could prove difficult for Google to maintain the lucrative margins it has historically enjoyed in its search advertising function.

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