For a long time, the shift of ads to the internet has been changing how we buy and sell things. Now, artificial intelligence (AI) is further changing not just advertising but also search behaviors and website visibility. With AI, ads and search results can be much more about what each person likes or needs.
As we look at how AI is changing ads and searches, it’s clear that this tech is not just something extra for marketers. It’s a big change that’s making how we see and think about ads online very different from before.
The Decline of Traditional Advertising
Most conventional forms (print, broadcast, and radio) have been losing ground to online ads for years. And the reason is simple: Facebook and other social media can track user behaviors so well that their personalized ads can make them feel like they are being spied on. Consumers enjoy the free services, and companies enjoy showing them ads.
Emerging Ad-Free Models
But more and more, consumers are getting the chance to avoid the onslaught of advertisements. Meta, owner of Facebook, has offered customers in Europe ad-free subscriptions to Facebook and Instagram. X has also followed suit in offering an ad-free option.
The Shift in Audio and Visual Media
At the same time, ad-supported radio has been playing second fiddle to streamed music and podcasts on platforms like Spotify, 40% of whose 574 million users pay money to listen ad-free. TV has been going down a similar road. Streaming has been chewing into cable and broadcast networks’ share of viewership for years. Whereas broadcast and cable television are stuffed with ads, many American streaming customers pay companies like Netflix to skip ads as well.
Adapting Advertising Strategies
Either way, advertisers are confident that they have other paths to reach valuable consumers. At the close of 2023, the global advertising market is on track to grow 5-6% annually for the next five years, says Groupm, a data agency.
One thing home service marketers can do is fall back on platforms that homeowners cannot avoid, such as billboards. Sponsorship of sports and other public events is also immune to digital disruption.
The Evolution of Internet Search
Google, the biggest player, uses its own algorithm to rank webpages based on the number of other websites linking to them, which has been a good marker for relevance. Then they display ads related to a search’s keywords.
This is the way things have been done for over twenty years and has played a huge role in how marketers in the home improvement industry find homeowners.
But we’re stepping into a whole new world when it comes to finding stuff online. Gone are the days of just typing in a question and scrolling through pages of results. According to Google’s own research, “almost 40% of young people when they’re looking for a place for lunch, they don’t go to Google Maps or Search, they go to TikTok or Instagram,” says their senior vice president.
Now, they may be using AI chatbots too. Chatbots are making the hunt for information more like a conversation. The questions and answers can contain more variables. Want a dinner recipe that is cheap, delicious, and family-friendly? Finding a detailed answer on Google requires reading and comparing dozens of websites. But ChatGPT, on the other hand, can give you a list of options in a matter of seconds.
The Future of Advertisements in Conversational AI
Do these AI chatbots affect advertising?
Google says 80% of its search results do not have ads at the top.
The likely reason is that many of these are searches from people looking for information (“Where was Taylor Swift born?”), which is what AI chatbots are best at and what advertisers are least interested in.
But consumers are expecting a conversation from AI (“Which roofer has the most five-star reviews in my city?”)
Inserting ads throughout conversations like this won’t be easy. One possibility is to show fewer advertisements but charge advertisers more money for each.
A chatbot is likely only going to show a few suggestions when asked for the best roofers in certain cities, for example. Companies like Google are hoping home service companies will be more than happy to pay more to ensure that their companies are listed among the suggestions, or at least shown next to them.
Staying Ahead of the Curve
Change is the only constant, and nowhere is this truer than in the digital world. The key to staying ahead? Being where your audience is. The younger generation, currently swiping through TikTok, double-tapping on Instagram, and using ChatGPT to write their term papers are tomorrow’s homeowners. To remain relevant in the home improvement industry (one not exactly known for its forward-thinking), embracing the new is advantageous and imperative. It’s about knowing where your audience is, and where they’re headed.
