• by Laurie Sullivan  @lauriesullivan, Yesterday

AI search ads will impact traditional search businesses and present challenges for brands -- especially for those with heavy investments in traditional keyword-based search advertising.

Ad spend for AI-based search is expected to rise from slightly more than $1 billion in 2025 to nearly $26 billion by 2029, with the media expected to contribute 0.7% of total search ad spending this year, according to Emarketer’s first estimates, released Wednesday. The expectation is for it to increase to 13.6% by 2029.

The other challenge is that AI-driven search tools significantly reduce the need for users to click through multiple traditional search results, which makes Emarketer analysts believe “Google will hesitate to fully implement AI search at a large scale until they have clearer data on its net economic benefit and user engagement outcomes.”

The forecast and estimates are based on Emarketer’s proprietary analysis and include quantitative and qualitative data curated from public companies, government agencies, research and media firms, and interviews with expert executives in relevant fields.

The company’s analysts also reported seeing companies like Google expand AI search monetization in more commercialized industries such as consumer packaged goods (CPG), although market segments are experiencing varying rates of AI advertising adoption due to these concerns.

For example, financial services, technology, telecom, and healthcare are seeing rapid growth, whereas retail has shown slower adoption rates due to greater uncertainty around return on investments (ROIs) and negative impacts on traditional search strategies.

Comparisons between AI search and mobile adoption have been made because both are based on low initial costs, ease of user adoption without special training, high user engagement levels, and pronounced benefits in convenience over their predecessors.

The difference indicates that AI adoption may initially be slower than that of mobile, due to credibility concerns. Companies also are concerned that AI will cannibalize established search ad revenue streams.