Google Losing Search Ad Dominance to AI, Amazon, TikTok

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Google is the most popular search engine in the world, but its dominance over search ad revenue—and Gen Z's vernacular—is losing steam.

According to a Wall Street Journal report, Google's share of the $88.8 billion U.S. search advertising market is expected to fall to the lowest point in over a decade as a diverse set of competitors like Amazon, Perplexity AI, and TikTok deliver alternative search experiences.

Consumers are conducting product searches through Amazon and social media searches through TikTok, with targeted ads creating revenue for each business along the way. Perplexity is expected to infuse its AI search results with ads later this month.

Those rival offerings will push Google's U.S. search ad market share below 50% next year and bring Amazon's share up to about 25%, per the WSJ.

Related: Google's AI Overview Has Changed Since Its Debut, and These Websites Have Benefitted the Most

Moreover, Bernstein Research shows that Gen Z is barely using the term Google as a verb. Young users are "searching" through social media, Amazon, and ChatGPT; they aren't "Googling," Bernstein analyst Mark Shmulik wrote in a September note.

As of last week, Google's AI Overviews now display ads with relevant products under a "sponsored" banner. According to a Google spokesperson, the ads will only appear under relevant searches.

Example of ads in Google AI overviews. Credit: Google

Even with AI rivals like ChatGPT, Google's numbers remain strong. Its share of the overall search market has remained at least 90% so far. Bing, Yahoo, and other search engines have less than 4% each of the market.

Google ad revenue also increased from 2022 to 2023, rising from $224.47 billion to $237.86 billion.

Related: Google Co-Founder Sergey Brin Is Back at the Company 'Pretty Much Every Day.' Here's What He's Working On.

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