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Is It the End of Search Advertising as We Know It?
By Max Starkov
Thursday, 19th September 2024
 

Recently Hospitality Net asked its World Panel experts whether the integration of generative AI in search on Google, Bing, etc and the emergence of 'pure' gen AI search engines will put an end to the CPC (cost per click) search marketing.

Here is my take:

Google has never had a first-mover advantage. Even so, Google has always been able to smash all of its competitors who had enjoyed first-mover advantage. The same applies to the threats posed by generative AI engines like ChatGPT, Claude, etc.

By incorporating its Gemini genAI engine into its search, Google has provided an elegant embedded genAI solution to its 2.5 billion monthly unique users. Compare this to ChatGPT's 180.5 million monthly users

Today Google controls 91.54% of the Global Search Engine Market. Less than 41.5% of users click on links in the SERPs (search engine results pages) vs 58.5% who don't (so called zero-click category). So your Google Ads and Google Hotel Ads already act mostly as display ads vs CPC (cost-per-click) ads.

I am convinced that if the zero-click share increases to above 2/3 in the SERPs, Google will introduce CPM (cost per Mille) fee format.

In the mean time, don't forget to invest adequately in your Google marketing: If you have well budgeted, well-optimized campaigns, Google will generate 55%-65% of your website bookings: 30% from SEO, 20%-25% from paid search, 5%-10% from metasearch (Google Hotel Ads) at blended ROAS (Return in Ad Spend) of at least 1500% (15x).

Max Starkov
Hospitality & Online Travel Tech Consultant & Strategist

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