Google‘s dominance in the nearly $300 billion search advertising market is reportedly facing challenges. According to a report by the Wall Street Journal citing data compiled by eMarketer claims that the tech giants’ share is expected to drop below 50% in the US in 2025 for the first time in over a decade. Several factors are reportedly the reason behind this decline: the rise of rivals like TikTok, e-commerce major Amazon and Jeff Bezos-backed Perplexity, the report claims.
Google faces rising competition
TikTok, the popular video platform, which is banned in India, reportedly allows brands to target ads based on user searches, directly competing with Google’s core business in the US. AI startup Perplexity is reportedly planning to introduce ads this month, offering brands a new way to reach users through its AI-generated answers, the WSJ report notes.
Meanwhile, Amazon has reportedly captured a significant portion of search ad spending as consumers increasingly begin product searches on its e-commerce platform. These developments, coupled with the rise of artificial intelligence (AI) and social video, are reshaping the search advertising landscape and threatening Google’s long-held dominance in the US, the WSJ report adds.
Despite Google’s current dominance in the search ad market with a 50.5% share, Amazon is reportedly gaining ground and is projected to capture 22.3% of the market this year with a 17.6% growth rate. However, advertisers have reportedly welcomed this as they seek more options and potentially lower costs.
How AI is shaping the search ad market
Google recently announced that it will include ads in its new AI-powered search summaries, starting with mobile searches in the US. In a blog post, Google explained that these summaries will provide direct answers to user queries and include relevant ads, like showing a Tide pen ad from Albertsons within the answer to “How do I get a grass stain out of jeans?”. This reflects the broader shift in search towards AI-generated answers and presents a new way for advertisers to reach consumers.