Google Faces Growing Competition in Search Advertising Market

Investing.com — Google’s dominance in the $300 billion search advertising market is facing challenges from emerging rivals like TikTok and AI startups, as reported by the Wall Street Journal on Monday.

The publication highlighted that while Google has long been the leader, advancements in artificial intelligence and social media search are beginning to erode its dominance.

TikTok, a rapidly growing short-form video platform, has recently rolled out a feature allowing brands to target ads based on users’ search queries, which competes directly with Google’s core business.

Additionally, Perplexity, an AI-driven search startup supported by Jeff Bezos, plans to introduce advertisements alongside its AI-generated answers. Currently generating revenue from a $20-a-month subscription, Perplexity could further disrupt the search advertising landscape, according to the WSJ.

Citing research firm eMarketer, the WSJ reported that Google’s U.S. search ad market share is predicted to drop below 50% for the first time in over a decade by 2024.

Competitors like Amazon have also been increasing their market shares; Amazon is expected to seize 22.3% of the market this year, up from 17.6% in 2022.

Despite these challenges, Google continues to adapt its search platform by integrating AI-generated summaries and ads into mobile searches. Brendon Kraham, Google’s vice president overseeing search ads, expressed confidence in their approach to monetizing AI experiences.

Nonetheless, there is a noticeable shift as advertisers begin seeking alternatives. Digital advertising executive Nii Ahene indicated that for the first time in 15 years, viable alternatives to Google are emerging.

The growing competition, along with Google’s ongoing legal issues, paints a complicated future for the tech giant’s hold on the market.