The Year in Search
Digital has won.
Digital Ad spend is now 1.25 trillion dollars, with the split following an intense power law. America spends $400 billion, roughly 1 in 3 dollars spent on Ads anywhere. The UK at #3 spends only $58 billion.
The dominant Ad format in the world are Search Ads, They make up around $350 billion in Global spend.
Growth in Ads will be concentrated in just three digital platforms (Google, Meta, Amazon); everything else is a rounding error or in free fall.
At the start of this year I had concerns. Glitch was showing great results, but was Search about to implode?
Everyone was eager to hammer nails into Google’s coffin, it was slow and bloated, IBM for Millenials. Google had been undefeated for a decade and now it had a black eye. OpenAI was a nimble startup, who probably had AGI internally, while Google was a battleship struggling to turn. Someone said to me, the thing about turning a battleship is that it’s a battleship.
Google made its most dramatic UI change ever, forcing AI overviews on 2 billion users, and is now the dominant source for AI. You might be like me and love deep research sessions on ChatGPT. But you’re in the minority, most people prefer quick answers from quick searches. Google has also released Gemini 3, the world’s most advanced model, up to date on search results. Open AI’s model still thinks it’s 2024.
This isn’t as bad as you would think, because the only way to keep an LLM up to date is to use web search. Search will increasingly become something dominated by AI agents, not humans. So why are Search Ads the dominant Ad format?
WIth the UI change the top of fold on Google is now dominated by AI results. And Ads. Ads appear above, beside and below AI overviews. Ads have not changed their click through rate spectacularly, but they haven’t dropped either. Compare this to the freefall of organic and you’re left with two options. Crack GEO, or buy ads. While Organic SEO typically got 40% of clicks, the new metric for successful GEO is more like 4% (down to 1% if you’re targeting OpenAI)
96% of Google’s AI mode searches end with Zero Clicks. As well Zero Click searches in regular search are up about 33%. Does this mean search is becoming less useful for finding things? Or that AI has given us a higher bar for clicks. When people search now, they are searching for results, and they increasingly are searching for brands.
The data backs it up. CTR is down 30% while CPC is up over 34%. For many marketers this is terrifying and are moving budgets out of search. Buying inventory that’s more expensive with fewer clicks? Seems wrong. But this is assuming Search in 2025 worked like it did in 2024. There are now fewer quality searches, top of which is Brand. While people are doing research on AI, decisions are made on Search. People’s minds aren’t made up, they’re essentially chasing down real websites to confirm the AIs work. Competitor keywords have never worked better because people are keen to click on alternatives. They are eager to see if the model is hallucinating, because it often still is.
AI overviews are replacing messy upper funnel searches, like what do I cook for dinner, what happened in the news, how do I fix X. Google also rolled out AI overviews into purchasing journeys in Q3 and Q4.
If AI is collapsing traditional search, will AI collapse branded search too? There’s evidence it is putting pressure on. My bet is against it. AI is fundamentally useless at making decisions. It doesn’t have any actual preferences, it will always equivocate. Brand is about connecting with your customer, it’s about being the last port of call.
While working at Google I used to say a TV company doesn’t make the most money because its Ads are the best, Search Ads is the biggest platform because Search is the greatest product. AI may be a competitor to that product, but it is clear it will still be monetised through the same channel.
With Thanks:
https://dreamdata.io/blog/dreamdata-benchmarks-google-search-branded-ads
https://searchengineland.com/google-ai-overviews-surge-pullback-data-466314