If you rely on Google’s search engine to find products or services, you’re probably familiar with the ads that pop up alongside your results. Google’s dominance in the nearly $300 billion search advertising market has seemed untouchable for over a decade. However, according to a new report, the tech giant’s share of this market in the US is projected to dip below 50% by 2025. This marks a significant shift and poses serious challenges for Google.
Several factors are contributing to the expected decline. Competition from platforms like TikTok, Amazon, and Perplexity is shaking up the space. For instance, TikTok, the popular video-sharing platform (though banned in India), now lets brands target ads based on user searches. This directly threatens Google’s core search business in the US.
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Additionally, Amazon has become a major player, capturing a large chunk of search ad spending. Consumers are increasingly starting their product searches on Amazon, and the company is expected to secure a 22.3% share of the search ad market this year, with a growth rate of 17.6%, according to a report by The Wall Street Journal (via TOI).
On top of that, a new competitor, Jeff Bezos-backed AI startup Perplexity, is reportedly planning to introduce ads through its AI-generated answers, offering brands yet another alternative to Google. This combination of rising competitors and new ways of searching has advertisers rethinking their strategies.
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The company recently announced plans to include ads in its AI-powered search summaries, starting with mobile searches in the US. This means when users ask questions like “How do I get a grass stain out of jeans?”, Google will provide AI-generated answers alongside relevant ads, such as one for a Tide pen.
While Google still holds a 50.5% share of the US search ad market, this figure is expected to drop. With Amazon growing rapidly and platforms like TikTok and Perplexity offering new opportunities for advertisers, Google’s once unshakable dominance is now being tested.