OpenAI's New Search Engine And The Future Of SEM

OpenAI's announcement regarding the development of an AI-powered search engine marks a potentially critical development in the search landscape. The tool, which would be partially powered by Microsoft, is positioning itself as a direct competitor to Google. While it is unlikely that there will be any major shifts in the short term, advertisers should keep an eye on shifting user behavior trends.

There is no reason to think the search industry will be disrupted in a major way in the near future by this event.

The current market share discrepancy between OpenAI’s ChatGPT and Google serves as a helpful reference point. ChatGPT currently captures around 2% of search traffic, with an estimated 1.6 billion monthly visits compared to Google's 84.2 billion (December 2023). For additional context, Bing still only maintains 3.4% of global market share versus Google’s 91% - even after Bing integrated ChatGPT in 2023. While OpenAI's entry into the search engine space would introduce a player to the market, the immediate impact will likely be low.



One notable area of impact, however, will be the acceleration of Google’s AI tool Gemini. We’ll also see a larger and faster change in how people use search engines, especially to shop. The final version of OpenAI’s engine will help predict how shopping ads and retail media networks may be affected. The use of visual search for purchasing a pair of shoes or previewing a hotel room in a virtual video tour will change how people search, but may not immediately determine how they buy.

The industry shift toward generative AI in search engines is reshaping the strategies of SEM and SEO marketers. As the industry goes through a transformation from conventional link-based results to succinct and conversational AI-generated responses, a deeper understanding of the nuances of generative AI and its impact on user behavior will be required. Advertisers should adapt strategies to align with these changes, ensuring they resonate with the increasingly concise nature of search results.

With search behavior on the verge of a shift, advertisers should maintain a full-funnel approach to media where they can. Strong creative, an airtight measurement strategy, and tailored audience targeting on all channels will ensure any drop-off from Google search is covered. It’s unlikely that ChatGPT will take much market share from Google in a direct way, especially since apps like YouTube, Google Chrome, and Gmail are still some of the most widely used apps in the suite, but it will be important to monitor user volume closely over the next few months. Understanding how AI-generated search results use organic and paid content to build answers will be key to maintaining visibility in the evolving search landscape.

Overall, the potential entry of OpenAI into the search engine arena adds a layer of complexity to the industry. However, the focus should remain on how AI will impact search journeys, rather than just the players in the space.

1 comment about "OpenAI's New Search Engine And The Future Of SEM".
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  1. James Smith from J. R. Smith Group, March 21, 2024 at 6:02 a.m.

    Excellent points, but perhaps a bit too cautious. An associate recently noted that we just wanted better/more relevant link-based search results...not necessarily AI answers. While
    consumer adoption patterns will likely determine the direction and speed of change, there
    are still concerns. We don't have detailed transparency into the future these Big Tech players envision.

    Consider what could happen to the already fragile digital marketing house of cards. If search referral traffic drops, what happens to sectors like content marketing? How should brand marketers correct course to drive product discovery and website traffic? How will search AI impact click-based metrics?

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