What to Expect as GenAI comes to Google Search

By Mackenzie Richardson, Senior Associate, Paid Media & Ken Clark, Senior Director, Search + SEO at Material

As artificial intelligence (AI) grows in ubiquity across industries, AI continues to be a major focus of Google’s innovation, particularly with Search. Recently, Google unveiled two new Search products, one on the advertiser end and one on the user end: Conversational AI and Google Search Generative Experience. While both these innovations are still in testing phases and have only been rolled out to a fraction of the overall user base, it’s clear they have the potential to fundamentally transform Google Search.

The infusion of generative AI is an important evolution for the platform, and it promises an improved, cutting-edge experience for advertisers and users alike. At the same time, it raises some key challenges marketers must tackle as they prepare to navigate this transition.

What Is Conversational AI?

Conversational AI is an artificial intelligence that can simulate human conversation by utilizing a combination of Natural Language Processing (NLP) and Machine Learning. The AI is “trained”, using large amounts of data like text and speech, to understand human language. Through NLP, the AI learns to process human language and then uses Machine Learning to interact with humans in a way that mimics everyday conversation, while constantly learning from the experience and optimizing performance.

With a use case specific to Google Ads, Google intends to leverage conversational AI to streamline the process of campaign creation for advertisers. With this new system, the AI would require just a webpage URL from which it would generate copy and image assets to use in an advertisement. The workflow itself is designed to help advertisers build better search campaigns, more efficiently, through chat-based experiences.

What Is Google Search Generative Experience?

Google’s Search Generative Experiences (SGE) blends organic search data with generative AI to provide answers to search queries in a conversational format between the AI and the user. The experience takes place entirely on the Search Engine Results Page (SERP) and allows the user to access a greater amount of information without having to click through different links.

The AI not only recommends follow-up questions but also understands longer, more conversational queries, enhancing user experience and saving time. For example, a user can ask “What are the best ways to train a dog to stop barking at strangers in the park?” and SGE will provide information without the user necessarily needing to leave Google.

To better illustrate this experience, we tested keywords from a client’s paid search campaign by inputting them into Google. Starting with the branded keyword “Wilsonart Woodgrains,” the search engine generated results beginning with a summary of the product, its manufacturing process and a comparison feature against a competing product (wood veneer).

Following this, SGE provided a list of available colors and retailers offering the product, accompanied by links to specific pages on the Wilsonart website offering the product, including details on colors and different cuts.

Finally, the generative AI offered suggestions for further searches like “What is Woodgrain Laminate” and “What is the lead time for WilsonArt,” encouraging us to engage further and explore additional information we may not have considered otherwise.

Navigating the Transition to a New Search Experience

Conversational AI and Google’s Search Generative Experience are massive steps forward in the advancement of AI for commercial use. However, looking ahead to this evolution, we can anticipate a pair of nascent challenges for digital marketers: first, rising costs combined with declining value, and second, a potential loss in campaign control for advertisers.

The full impact that SGE and conversational AI will have on paid search costs remains to be seen, though it does present a basic supply and demand imbalance. The graphic below from Search Engine Land illustrates the amount of digital real estate SGE occupies on the SERP, with limited space available for paid ads.

Since 57% of Google’s revenue comes from paid search, it’s all but certain that a paid component in search will remain after the full integration of SGE, but how it will show up is still unclear. As ad space on the SERP diminishes, it’s natural to expect that the demand for that limited supply of real estate will increase. This will likely increase competition among paid search marketers for available space, alongside SEO marketers making the transition to paid search.

Additionally, the implementation of conversational AI in the SGE reduces the user’s need to navigate away from the platform to other sites. When users no longer need to click on links to access information (e.g. links to an advertiser’s product page) the potential value generated for advertisers diminishes. In essence, it’s possible costs will rise, while the ultimate value to advertisers declines.

Second, the integration of conversational AI in the Google Ads platform raises concerns about a potential loss of control for advertisers around creative content, messaging and audience targeting. Although Google asserts that initial tests indicate improved ad quality and campaign performance, these tests were conducted with limited exposure to the independent variables present in real-world scenarios.

This leads us to a broader question that will likely take time to answer: will conversational AI be more adept at building customer relationships than the existing systems of Machine Learning that power today’s Google Ads? While machine learning efficiently optimizes campaigns based on collected data, its understanding of the complexities of the human experience is still limited. AI may contribute to optimizing upper funnel metrics like reach and clicks, but its real test will be in whether it can foster high-quality user-advertiser relationships in the long term, which impact lower funnel metrics for advertisers.

What comes next?

While we – and advertisers everywhere! – wait to see Google’s next moves, we can make a few predictions. AI is evolving rapidly, but our intuition says that Google’s AI experience will be introduced gradually, and in such a way that it allows for more customized search results and ad results, but with just enough information to incentivize searchers to click an ad or visit a website for complete information. There is a balance to be struck between an AI-controlled Search experience and giving users the freedom to explore beyond the SERP as they see fit.

For marketers, advertisers and paid search specialists, now is the time to invest in education and professional development around GenAI, machine learning and the other factors that will impact the Search experience of the future. Engaging deeply with these issues now will provide a platform for success as Google’s SGE and, inevitably, other AI-infused digital experiences are rolled out across the consumer lifecycle.

At Material, our experts think deeply and critically about future-proof advertising strategies and the growing role of AI in the marketplace. From paid search to targeting strategies, AI is transforming how marketers reach their audiences. For a deeper look at the digital trends that are impacting advertising in 2024, check out our latest research in partnership with NewtonX.