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Alternate subject line: Search is slowing. Where is your budget going?
Happy Tuesday. One theme runs through today's issue: attention and ad dollars are leaving the old search habit. Meta's ad business is growing at more than twice the pace of Google's search business, buyers are quietly moving money out of search, and Reddit says AI answers are eating its Google traffic. Here is what that means for your plan.
1. Meta's ad business grew 26% while Google Search grew 12%
In Q3, Meta's ad revenue rose 26% to $63.1 billion. Google's search unit grew 12% to $63.4 billion. CNBC calls the 14-point gap the widest in Meta's favor since 2021, and it leaves the two nearly equal in size. Alphabet had its worst day ever on the market after earnings, down more than 12%. Meta's CFO said advertisers who adopted its AI recommendations drove almost 5% more conversions, and almost 10 million advertisers used at least one Meta AI tool in the quarter.
Why it matters: Search queries hit a record, but monetization is not keeping up as AI answers replace clicks. If search is your default demand-capture channel, now is the time to test how much of that pipeline you can earn elsewhere. Source: CNBC, Nov. 1
2. Buyers are moving 10% to 30% of Google search budgets elsewhere
Digiday reports, as summarized by AdExchanger, that ad buyers are scrutinizing Google search spend more than ever. With AI Overviews lowering click-through rates, ads are performing worse despite higher CPCs. One expert has seen some advertisers shift 10% to 30% of search budget into other channels, including Meta, ChatGPT, AI Max, YouTube and Demand Gen.
Why it matters: This is the budget version of story one. Before you reallocate, check whether your branded and non-branded search terms are really declining or just paying more for the same clicks. Source: AdExchanger Daily News Roundup, Nov. 3
3. Reddit says Google's AI Mode cost it 1 million+ search referrals a week
Reddit told shareholders that October search traffic dropped by more than 1 million referrals per week on average. CEO Steve Huffman pointed to Google's AI Overviews and AI Mode as the biggest part of the cause and said AI Mode "does not drive traffic." Reddit will test a logged-in-only experience in select markets outside the U.S. this quarter. Its COO said Reddit is "pretty skeptical of GEO."
Why it matters: Reddit is the poster child for citation-driven visibility strategies. If you have been betting on Reddit threads to show up in Google, watch what a logged-out visitor can read in the test markets, and do not assume the traffic will hold. Source: Search Engine Journal, Oct. 30
4. Magnite and PubMatic reportedly sign on to fill ChatGPT ad space
The Information reports that Magnite and PubMatic have signed deals to fill unused ad space in ChatGPT. AdExchanger notes they join OpenAI's ad-tech partners, which already include LiveRamp, Criteo, StackAdapt and Amazon Ads. AdExchanger also cautions that platforms often open to third parties early, then close the walls later.
Why it matters: ChatGPT is becoming buyable through the tools your team already uses. Worth a small test budget now, with measurement terms read carefully, while the access is open. Source: AdExchanger Daily News Roundup, Nov. 3
5. Martech consolidation: Publicis closes LiveRamp, Marketbridge buys Channel99
Publicis Groupe has completed its acquisition of LiveRamp, per its release. Last week, B2B firm Marketbridge acquired Channel99, a B2B advertising and attribution company founded by former Demandbase CEO Chris Golec. Terms were not disclosed. Channel99's pitch includes measuring how brands show up in LLM chatbot answers and how paid media affects generative search performance.
Why it matters: Independent data and measurement vendors keep getting absorbed by bigger players. If a tool in your stack is on this list, ask now what the roadmap and pricing look like after the deal. Publicis release | AdExchanger, Oct. 28
6. Svedka pivots after AI backlash
Marketing Dive reports the Sazerac-owned vodka brand is changing course after using AI to produce its big game debut, and is now challenging consumers to create its Super Bowl ad.
Why it matters: A reminder that AI-made creative carries brand risk when audiences notice. Decide where you disclose and where you keep humans visibly in the loop. Source: Marketing Dive, Nov. 2
That is the issue. If you only act on one thing today, pull last quarter's search CPC and click-through trend and see whether your budget needs the same conversation your peers are having. See you tomorrow.
