May 30, 2023
In the beginning, there was search.
In 1997, serial entrepreneur, and investor Bill Gross, launched the GoTo.com search engine out of his proto-startup incubator Idealab. Competing with then-heavyweights such as Lycos and Excite, Gross’ big idea had its moment at the TED conference the following February: Gross introduced paid advertisement next to search results, tied to a user’s search query, and sold through an auction bidding mechanism.
Two and a half years later, in October 2000, the up-and-coming search company from Mountain View, California, Google, launched a refined version of Gross’ innovation and called it “AdWords.”
The rest became history.
18 years later, OpenAI publicly launched the first version of GPT (Generative Pre-trained Transformer). Within four short years, we have moved through numerous iterations, with OpenAI launching ChatGPT in November 2022.
And this is where the world of search advertising starts spinning out of control.
And then there came AI…
Try a search for “best shoes to run a marathon in,” and Google welcomes you with sponsored listing after sponsored listing. As a matter of fact, on Google’s US site, every single link and placement above the fold (i.e., in the visible area of the screen) is an ad. Scroll down, and you will find a near-endless number of search engine-optimized listicles linking to affiliate marketing programs.
Execute the same query on ChatGPT. After a brief moment to “think,” the little typing cursor reveals a list of five popular options (spanning five brands), including the specific benefits of each model. ChatGPT closes its suggestions with a recommendation to try different shoes on and encourages you to visit a knowledgeable local running shop.
The latter interaction is so obviously better that it makes you question why you would ever consider asking Google Search anything ever again. It is the same feeling people had when they experienced Google Search for the first time in the late 90s/early 00s. And the rest became history.
And things become weird…
Consider that your average online store gets around half of its traffic from searches. Most media publications get (much to their chagrin) an equal amount of traffic from the same source. The discovery of new apps, websites, products, and services is driven by search engine traffic.
It is not hard to imagine that we will experience a mass migration of users’ questions away from Google Search (and its brethren) to AIs such as ChatGPT. It is entirely unclear how (at least in the beginning – longer term, we almost certainly are guaranteed the enshittification of AI) how this will play out – the most likely scenario is that oodles of online stores will become financially unsustainable. We will see a further acceleration of the concentration of purchases into players with strong, established brands.
The quirky new marathon shoes that received rave reviews from some early adopters and hardcore runners? ChatGPT might not think that they deserve mention in its response to your question… (via Pascal)
