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The AI inflection point in online advertising

By Jerry Dischler, Google VP & GM Ads. We’re at an inflection point: AI will continue to change how people engage with information and how businesses connect with customers, including digital ads.

By Jerry Dischler, Google VP & GM Ads. AI will revolutionise how people engage with information and how businesses connect with customers. For more than two decades, digital advertising has supported unprecedented access to information, content, and services for people around the world. Ads generate revenue for creators and publishers, and drive growth for businesses of all sizes.

Over the years, with every technological shift, we have transformed online advertising to be as relevant and useful as possible for people and businesses alike. Today, we’re at an inflection point: AI will continue to change how people engage with information and how businesses connect with customers.

At Google I/O, we shared our first steps to bring generative AI to Google Search with a new AI-powered snapshot and conversational mode. This new Search Generative Experience (SGE) will be available in Search Labs, a new way to access early experiments in Search. We also shared that Search ads will continue to play a critical role in this new experience. Ads will still appear clearly labelled, in dedicated spots throughout the page.

At Google Marketing Live (GML), we shared even more about how we’re driving an ads experience that is AI-powered and privacy-first. Here’s a look at how Google AI is already helping businesses drive growth in this new era of marketing. To learn more, register for GML.

Your ads, powered by AI

For several years at Google, we’ve been building products that apply cutting-edge AI to help us deliver on our mission — and we’re doing it responsibly. Google AI is a powerful tool for advertisers to increase their ad performance, craft inspiring creative, and protect people from ad fraud.

New ways to access information

With breakthrough advancements in large language models (LLMs), we’re able to better understand complex search questions and help people take the next steps in their search journeys — whether that’s deepening their understanding of a topic or finding their perfect purchase. Ads are, and will remain, a key part of helping people discover products and services from millions of businesses.

When a search is commercial, we match that intent with the right advertisers, ensuring we give people a range of options. That’s why Search ads will be a native part of SGE. We remain committed to the open internet and will integrate ads into evolving consumer experiences in ways that benefit everyone — people, creators, publishers, and advertisers.

Higher performance in an uncertain market

AI is also helping advertisers navigate the complex, rapidly evolving world of advertising, something particularly useful in this challenging macroeconomic climate. For example, Performance Max uses Google AI to help advertisers find untapped and incremental opportunities. An advertiser shares their campaign goals and creative assets, and our technology automatically produces and runs a highly effective ad campaign across all of Google’s channels. Advertisers who use Performance Max campaigns achieve on average over 18% more conversions at a similar cost per action.

Google AI also makes ads more relevant. Large advertisers typically use over 4,000 keywords across their Search campaigns, with very large advertisers using millions of keywords each. Broad match applies LLMs to match ads to relevant searches and help advertisers respond to what millions of people are searching for. Businesses that upgrade to broad match can see an average of 35% more conversions in campaigns that use a target cost per action.

Accelerating creative on new formats

AI transforms how businesses meet consumers, as the number of formats and surfaces consumers engage with dramatically increases. Google AI is helping advertisers easily create assets that work across formats. Last year we launched ads on YouTube Shorts and introduced technology that optimises any video campaign asset for a vertical viewing experience.

When advertisers add a vertical creative asset to their Video action campaigns, it delivers 10% to 20% more conversions per dollar on YouTube Shorts than using landscape assets alone. This is just one way we’re making creative easier. We’ll share more helpful tools at GML.

Building a privacy-first ads experience

As AI powers the future of advertising, privacy will be the foundation. We know that people are concerned about the state of their online privacy, and restoring trust in digital advertising is vital to the long-term durability of the ad-supported internet.

We’re introducing new privacy-preserving technologies that help businesses grow while being responsible stewards of people’s data. Privacy Sandbox — an open-source initiative built in collaboration with the ads industry, web browser developers, and other technology companies — will help replace advertising tools that relied on tracking people across the web and mobile.

Our ads teams have been experimenting with serving interest-based ads using privacy-preserving signals, including the Topics API from Privacy Sandbox, instead of third-party cookies. The promising results show that delivering relevant digital ads can be more private for people while delivering effective outcomes for advertisers and publishers. We’re also helping advertisers strategically measure their ad effectiveness in a new privacy-safe way.

Increasing control and transparency

Transparency and control must be core tenets of the ads experience. We have industry-leading, clear ad labelling and recently introduced more consumer-facing products that provide added choice, like the Ads Transparency Center and My Ad Center. In the first five months since launch, we’ve seen more than 120 million visits to My Ad Center globally.

My Ad Center gives people more control over the kinds of ads they see across Google, directly within the ads themselves. People are able to see more of the brands and topics they care about and limit ads they feel are sensitive. In the first five months after launch, we’ve seen more than 120 million visits to My Ad Center globally.

Growing businesses and supporting communities

Our customers’ successes keep us motivated and inspired. In 2022, Google Search, Play, Cloud, YouTube, and Google advertising tools helped provide more than $700 billion in economic activity for millions of businesses, nonprofits, publishers, creators, and developers.

The benefits of digital ads to communities are undeniable. Four in five small business advertisers and publishers say digital ads help them compete with larger businesses. We’ll continue to build the tools and technologies that help create more opportunities for everyone, including companies of all sizes. For digital advertising to remain a positive force, our industry must evolve with changing user behaviours and technology.

This is our moment as an industry to embrace a new era of marketing, to unlock the possibilities of AI, and to rise to increased privacy expectations. If we get this right, we’ll not only build the way forward together, but preserve the open internet that billions of people rely on.

 

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