Google plans to bring ads to its AI-powered Search Generative Experience
During the company’s earnings call, it was revealed that Google is focusing on how to bring revenue from its AI-powered Search Generative Experience (SGE), and the solution is to fill it with ads.
On Tuesday, Google's parent Alphabet announced its third-quarter earnings and witnessed significant growth in all its businesses. But the biggest earner was its Search business which saw an 11 percent growth year-on-year and reached $44 billion. Search has also seen a wider implementation of AI integration, also known as Search Generative Experience (SGE). Now, Google wants to turn SGE into a sustainable revenue generator and bring ads to this space as well. During the call, Google also highlighted that it views SGE as the potential product that can eventually replace Search.
According to a report by The Verge, Google CEO Sundar Pichai underlined the company's commitment to finding native formats to experiment with how ads in SGE work on the earnings call, and how its content flow can be displayed on it. In fact, in March, Google showcased some of the ways relevant ads could be shown to users, and many expressed their concerns over it being obstructive and ‘filled with ads'.
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But now, it appears that Google is going deeper to integrate ads into its AI Search product. During the call, Philipp Schindler, chief business officer emphasized, “It's extremely important to us that in this new experience, advertisers still have the opportunity to reach potential customers along their search journeys”.
Google to show ads on SGE
Although these are relevant ads, it can be quite frustrating if ads are displayed frequently. For example, in the March reveal, it was seen that every follow-up query to the original search came up with a sponsored product placement. While this does give advertisers more relevant visibility, it can lead to the potential customer being put off. It seems that Google is aware of the possibility too.
“We are making sure the product works well, and we're generating value for our ecosystem and that ads transition well,” Pichai said, as the SGE rollout continues.
On a positive note, Google does not need to worry about revenues, so it can take its time to make sure ads do not disrupt the user experience of the product. As per the earnings release, all the major businesses of the company have seen a year-on-year growth. The company earned $7.9 billion in revenue from YouTube ads, and it has clocked $59 billion from its general advertising. If Google plays its cards right, it can post an even higher number next quarter with its new ad real estate in SGE.
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