By A recent Wall Street Journal made the top of feeds in the digital marketing world, claiming that Google is on the precipice of losing the lead in the search advertising wars. Supposedly, in 2025, for the first time, Google may fall under 50% of market share in search advertising (according to an eMarketer report the WSJ cites).
The WSJ points to three factors: the rise of TikTok, the growth of AI search engines (Perplexity is prominently mentioned), and the antitrust pressure Google faces in their monopoly trial.
But… on investigation of the data, I think all of these wrong, and digital marketers should be wary of being misled by hypothetical causes vs. what’s really going on…
Transcript
This article right here, was at the top of my LinkedIn feed. It was, notable in my threads feed. It was in Twitter, which I I rarely check. But this Wall Street Journal article is really interesting.
I I’m gonna show you. It it seemed a little fishy to me as well, and that’s because when I read it, it sort of made the case that, AI search like like chat g p t and perplexity in particular are taking market share away from Google search advertising revenue. Not search market share, search advertising revenue and TikTok as well. Now, as a percentage of digital, search is shrinking a tiny bit.
I I thought I would interrogate the core assess assertions that that the article is making because because I found it so fishy. And, this from the Winterberry group, this year was I think I think pretty a pretty decent assessment. It might be off by a little bit, but you can see search is still growing. Right?
So search advertising, we’re talking about bidding on keywords.
This is on Google and Bing, but also potentially on perplexity which which according to Wall Street Journal has not launched search advertising yet but will and TikTok which has but it’s very very nascent and not a lot of people, search TikTok. They they mostly But it’s still growing. Right? So search advertising is not declining, therefore, that’s not the cause.
I also tried to figure out if Google search market share is somehow in jeopardy. And according to our latest data, it’s Datos, our clickstream provider. Right? I did a big study, back in the spring.
Certainly does not look that way. And stat counter confirms that Google is basically as strong as it’s ever been. What you see right here is very close to ninety percent. I think it’s eighty eight percent, market share in the United States and more than ninety percent globally.
Google stock did take a little bit of a beating over the summer, but to be honest, so did every major tech stock, and and a lot of the S and P five hundred overall. So that that didn’t seem to be what was driving this.
We looked at the data as well. So I did a recent webinar with Datos, and we looked at, whether people who search Google are switching to AI search engines. Right? Lots of people in your LinkedIn feed are probably telling you that they are especially in b to b software world and tech world. Well, you can see here that, the percent who use only traditional search engines, never used, any AI engine is eighty three percent.
And by August twenty twenty four almost seventeen percent of people in Datos’ panel at least which is which is millions of users worldwide and and and some millions, in the US.
Seventeen percent as of August, so that’s pretty high, but ninety nine percent of those AI users also use Google. On average, users are searching Google two hundred times per month which is up from last year.
So that suggests Google search advertising business should be stronger not weaker. Now you can see that the searches per search user declined from May to August. That’s actually just seasonality. That’s pretty typical.
You can see the that search MAUs on Amazon. We’re also lower in August, and that is, again, because people are buying fewer things, during the non school year during the summer.
But if TikTok is this threat that the Wall Street Journal is making it out to be, why aren’t they calling out, look at DuckDuckGo. It’s way up here. Right? And August was stronger for it in at least in monthly active users.
EBay should have been mentioned in there. Right? Walmart. These are all ahead of TikTok, and perplexity is way down here. Granted, perplexity is small. They’re growing faster.
But, for ChatchieBT and for perplexity, we looked at the number of times people search per month. It’s thirteen and a half or sixteen and a half. So it’s it’s just doesn’t add up. Right?
Like, yes, these platforms are growing, but perplexity grew from, you know, whatever thirteen percent to seventeen percent, it grew from twelve to sixteen. So maybe in ten years if they continue their growth at the current rate, they might be a challenge to Google. But right now, something’s weird. So what the heck is going on here?
So I looked at the study. Right? Because because, the Wall Street Journal quotes eMarketer in saying that Google’s share of search advertising will be under fifty percent for the first time in a decade.
Take a look at this. So they’re they’re probably right. This was twenty twenty three, this is twenty twenty four, and so twenty twenty five will probably be right around fifty percent, it could be under fifty percent. What’s happening? Oh, Amazon is growing a little bit and other is growing a little bit.
Well that that is not what the article suggested.
It didn’t it barely mentioned Amazon, here’s where search advertising, search advertising spend is going. Right? Sorry. All digital advertising spend is going, and you can see that in search advertising Amazon is the one that’s growing. Look at this, they’re growing faster, right, than Google is growing in terms of percentage, but they’re actually growing fewer dollars. So Google is growing more dollar wise, it’s just that Amazon’s growing faster as a percent because they were a smaller percent before.
That’s not much of a story.
I guess Amazon is selling more ads because they’re not actually growing their number of searches seasonally adjusted by all that much.
But what we can see is that I went back in time and looked at the previous, you know, decade and look look back in twenty eighteen. Right? Google’s, market share of all search advertising was around seventy percent and then it fell by, you know, I guess this this slope ended up being sharper than was expected in March of twenty twenty three when the study was put together. And as for net revenue, you know, you can see them at in the seventies, and now Amazon has grown, Microsoft has grown a little bit, Yelp has grown a little bit. Others have entered.
My my big takeaway actually is that if you look at the other bucket, that’s the most interesting bucket, but it’s not TikTok and AI. It’s Walmart and Instacart and Spotify and Apple and Hulu, to to be frank. Right? Like, these companies which did not previously have significant advertising revenue, digital advertising revenue, and offerings because Walmart and Instacart in particular got grouped into search advertising because people use keywords to search for them. That’s where a lot of that growth is coming from, and it’s nipping away at Google’s heels, but Google continues to grow.
So I I don’t know whether I call this a non story, but I think this is why media literacy and data literacy is so important. Because if you just see the Wall Street Journal’s headline in your feed, you’re gonna think to yourself, oh man, is Google dying? Are they losing search market share? And that’s not what’s going on, and that’s why it pays to interrogate these, articles and and question what’s really happening.