Hey, everyone! Today is the last edition of AdExchanger’s daily newsletter for 2024. We’ll be back on January 2nd. Thanks for reading, and have an amazing, restful, healthful holiday season.
2025 is going to be a year of serious change – and drama. We’ll be here for it.
A New Generation
Google plans to create an “AI Mode” for its web search engine users, which would essentially change the search experience to the Google Gemini generative AI chatbot, The Information reports.
People will have to affirmatively switch to AI Mode via a tab option, like they do for Shopping, Images or News. But the plan still represents a major potential expansion of Google’s generative AI search, which had a somewhat rocky launch earlier this year in the form of AI Overviews.
As of October, AI Overviews reach more than 1 billion global users every month, according to Google.
For the sake of comparison, OpenAI CEO Sam Altman said that its generative AI engine now reaches 300 million people per week.
Creating an AI Mode is another way for Google to instantly ramp distribution of its generative AI search. YouTube could quickly make Shorts, its TikTok clone, a scaled monster – now with more than 70 billion views per day – because YouTube prominently places Shorts vids in most people’s normal YouTube feeds.
While Google pulls levers for its own reasons, what is certain is that developers and publishers that rely on Google Search – good ol’ Google Search – will be pushed further down the results page or possibly off it entirely.
Do It For The Gram
“When a big one falls, four little ones move up.”
OK, so maybe that phrase isn’t a powerful maxim as much as it’s a throwaway joke from an episode of “30 Rock.” But, certainly, the social media vultures now circling the air above TikTok as it faces an impending ban are hoping it holds true.
Not that TikTok’s competitors could be considered “little.” According to eMarketer, Instagram is projected to drive half of all Meta’s US ad revenue in 2025, at a grand total of $32.03 billion, Adweek reports.
A ban could allow Instagram to capture more than one-fifth of TikTok’s current $12.43 billion in ad spend, which is probably why Instagram has been hard at work recruiting creators and rolling out new features.
But even if Tiktok earns a temporary stay of execution, Instagram still appears on track to grab more market share.
In fact, Instagram already generates almost twice the ARPU as TikTok does, at $223 versus $109. (Facebook proper, for the record, makes $191 on average per user.)
Shopped Out
Shopify has reached a stage of growth where it’s starting to threaten many of the startups that provide the add-on software Shopify offers its merchants.
This is like “walking a tightrope,” as The Information puts it.
It’s a familiar tale. Big companies like Google, Snowflake, Amazon and AWS have all been through this.
At the moment, Shopify’s growth ambitions are mostly affecting service providers for shipping, customer service and delivery insurance. But the same could also become true for ad tech and marketing services.
For now, though, Shopify has taken a hands-off approach, letting a few partners, including Google, Meta, Amazon and Criteo, to benefit greatly while it benefits relatively marginally.
Klaviyo, for instance, is built on top of Shopify, and Shopify was Klaviyo’s pilot investor (and remains a large stakeholder post-IPO).
Shopify takes a risk in competing with its add-on services. Some big brands will prefer not to consolidate, while merchants and shoppers may prefer more options, like multiple checkout features, for example.
But for Shopify, these one-time partners may soon start to look like low-hanging fruit.
But Wait! There’s More!
Uncertainty over TikTok’s US future is creating a rift between creators and agencies: Some see it as inevitable, while others are convinced it won’t stick. [Digiday]
Reporters Without Borders has called on Apple to scrap an AI feature that generated a false headline about the person charged with killing UnitedHealthcare’s CEO. [BBC]
Malaysia will require social media platforms such as Facebook to acquire licenses in the country by next year. [Bloomberg]
Apparently, it’s possible to get around some LLM restrictions by TyPiNg LiKe ThE SpOnGeBoB mEmE. [404 Media]
You’re Hired
Omnicom taps Katie Klein as chief investment officer. [Adweek]
