• by Laurie Sullivan  @lauriesullivan, June 9, 2025

Advertisers have had disagreements about the price of clicks vs. impressions and conversions since Google, Microsoft and others added advertisements to generative artificial intelligence (GAI) search platforms. 

Wall Street analyst firm Raymond James has published a research note analyzing impressions and paid clicks. The research previewed on Monday is part of an upcoming core AI search traffic model for the U.S.  

Modeling suggests the rollout of Google AI Mode could generate high single-digit to low-double digit growth in impressions.

Even if paid clickthrough rates (CTRs) decline, it could lead to an acceleration in paid clicks -- depending on the ad formats advertisers use. Google introduced ads in AI Mode at its annual Marketing Live event in May.

“The trajectory is highly dependent on the rate at which Core Search DAUs shift to AI-powered Search DAUs (AIO, AIM, Gemini), the acceleration in queries and impressions from AI Search, and the pace of ad load increases in AIO/AIM as well as eventually Gemini,” Raymond James analysts wrote in the research note.

The note also points to Emarketer’s recent study that highlights Perplexity’s advertising approach, which will make blue links less relevant and AI Search ad formats lean on impressions, sponsored answers and questions, and/or affiliate links.

Advertising spend for AI-based search is expected to rise from slightly more than $1 billion in 2025 to nearly $26 billion by 2029, according to Emarketer. The media is expected to contribute 0.7% of total search-ad spending this year, and to rise 13.6% by 2029.

Raymond James expects companies to use a new search key performance indicator. Brands and agencies have long talked about redesigning media mix modeling, as well as metrics and measurement to adjust to AI search ads.

“[We] believe rising competitive intensity (e.g., OAI, Meta AI, Anthropic. Perplexity, etc.) and possibility of a noisy transition (e.g., notable differences in traditional vs AI search rankings in certain categories) may constrain the multiple in the high teens until the visibility around durable search ad revenue growth and search antitrust remedy trial outcome visibility improves,” Raymond James analysts wrote.

The report notes changes, including a possible Chrome divestiture, exclusive distribution agreements and data sharing in focus. It could come as early as August.

“Impressions may prove to be a more important KPI than paid clicks for AI search depending on how ad formats evolve,” according to Raymond James. “We forecast ~8% CAGR in total U.S. search impressions through 4Q26 as faster growing AIO/AIM expands the overall query market by ~10.5% CAGR.”