The Foundational Shift In Digital Media Is Finally Here

A few years back, I was writing that the open web ad business would fall prey to walled gardens and the collective strength of the few.  This was the oligopoly of the web, and it made perfect sense.

In the eyes of some, this has come to be a reality, but very few people saw the reality that AI would dramatically change the way walled gardens would operate.  In fact, the video and AI combination are going to have a dramatic impact on the overall ad business for the next 10 years.  It’s a one-two punch that will change how brands and agencies do business.

Search Drops, and Video Saves The Day

First off, I will reiterate my point from last year.  I predict a 50% drop in overall web traffic in the next five years.  Why?  Simply because generative search results remove the need for a consumer to click on the blue links and learn what they are looking for.  AI gathers, aggregates and synthesizes a response back for you, and even though you may still visit some sites for more info, the volume of that visitation will decrease by at least 50%.



If you follow the money, that means SEO becomes a science about building knowledge bases rather than beautiful web sites.   It also means Google will have to find a new source of revenue to counteract the drop in revenue associated with paid search.  I predict that Google paid search revenue will drop by 25% because it will still feature the first page of paid spots, which is the most valuable inventory Google has.

Of course, Google will more than make up for that loss on paid search by seeing its inventory and associated value from YouTube and YouTube TV continue to grow exponentially over that same time period.  Don’t stress about Google.  It will be fine.

Search Remains the Same, But Video and Retail Media Grow Like Crazy

Amazon will come out of all this looking even better than it does now.  It has successfully built a behemoth in a fraction of the time it took Google and Facebook, and those two businesses grew fast.  Amazon’s search is going to stay valuable because it is self-contained, and in terms of a walled garden, it has the most defensible moat because all its users do is buy things, and Amazon knows more about those users than anyone.  

Meta will survive because of the addiction of social media and the growth of retail media in social.  I think even TikTok will do well, because it is a media company first, and someone is going to buy that media property, algorithm attached or not, and convert those eyeballs into customers.  There are simply too many eyeballs and too much time on-screen for that property to go away, plus TikTok is building a viable store and people are buying in the platform.  Oh, and TikTok is all about video, so once again video rules.

In all the cases above, video and AI are the driving forces.  The foundation of the web until last year was page views and visits driven by search.  The web is fundamentally changing, and the change will be quick.  It is shifting from a company and publisher-centric model back to a consumer-centric model where the manifestation of content is delivered in terms requested by the consumer rather than how brands and companies want to deliver it.  This is a fundamental shift, and it is all driven by the fact that AI flips the script, and video is the fastest-growing medium of all.

How are you planning accordingly?

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