Is It Over With Overview?
Digital marketing agency Seer Interactive published a blog post on publisher click-through rates following the expansion of Google’s AI Overviews (AIOs). You know, those generative-AI responses that sometimes now appear atop Google Search queries.
Seer’s findings demonstrate how difficult it is to analyze and understand generative AI search engine results. Tracy McDonald, Seer’s product development lead, details how she merged paid and organic traffic via Google Ads and the Google Search Console and combined it with data from ZipTie, a developer tool that tracks AI-generated searches.
The data is troubling for publishers.
In January, when a publisher had an organic Google Search placement and no AIO, the CTR was 4% (which is actually quite good historically). But when there’s an AIO, the click-through rate drops to 0.6%. The same dynamic holds for paid traffic. Google search ad CTRs stand at 17% when no AIO appears and plummet to 6.5% when AIO kicks in.
In other words – and totally unsurprisingly – Google’s AI-generated responses are diverting audiences from publishers. The data also shows how much better the CTR is for ads compared with even the top organic rankings, but that’s another kettle of fish entirely.
Bull In A China Shop
If you’re a business that relies on Chinese imports or a publisher that relies on ad money from ecommerce platforms like Shein and Temu, then Tuesday evening was probably a very stressful time for you.
On February 1, President Trump signed an executive order imposing an additional 10% tariff on most Chinese goods and eliminated the de minimus exception, which exempts packages shipped directly to US buyers with a value under $800.
Tuesday, however, was when Trump decided that the tariffs would take effect, The Washington Post reports. The United States Postal Service even temporarily suspended all inbound shipments from China and Hong Kong until early Wednesday morning.
There could be shipping delays for the foreseeable future, however – and, of course, higher prices.
That’s bad news for Chinese third-party sellers of all stripes, not just Temu. But it’s also bad for the digital ad economy, considering how much money Temu spends on online advertising – a reported $2 billion on Facebook ads alone in 2023, and $386 million in Q1 2024.
At least there aren’t any tariffs being put on the ads themselves. Well, not yet, anyway.
The Tariff Dip
But that’s not to say Trump’s tariffs won’t affect ad budgets, even beyond Chinese sellers.
Brands that rely on imported materials for manufacturing, from automotive to electronics to agriculture, will likely cut ad spend due to tariffs, The Wall Street Journal reports.
If proposed tariffs on Canada and Mexico go through, in addition to those on Chinese imports, then the price of each new car sold in the US would rise by about $3,000, according to Arun Kumar at consulting firm AlixPartners. Automakers would slash their marketing budgets to offset any losses from price increases, he says.
COVID-19’s supply-chain disruptions resulted in a 20% drop in overall ad spending, Kumar says. In comparison, tariffs on China, Canada and Mexico could trigger a pullback of 5% to 15%.
Brand budgets and traditional media like print and linear TV would suffer most, though, Kumar adds, because advertisers would prioritize digital performance marketing.
Ad tech wouldn’t be spared, either. Tariff turmoil would “absolutely impact everybody, including the large ad platforms,” says Truist Financial’s Youssef Squali.
However, Big Tech could weather the storm. Meta, for example, has the leverage to squeeze advertisers for higher CPMs, Squali says, as evidenced by its average 14% price per ad increase in Q4.
But Wait! There’s More
Is a porn app the EU Digital Markets Act’s signature achievement? [Mobile Dev Memo]
Gannett’s affiliate marketing site, Reviewed, which shut down in November citing difficulties as a result of Google’s recent search algorithm changes, has continued to operate under new owner StackCommerce. [The Verge]
Grubhub confirms a data breach affecting customers and drivers. [TechCrunch]
How a Musk ally wants to start deploying AI in the government. [404 Media]
You’re Hired
LGBTQ+ streaming network Revry names Daniel Schnider as its head of business development and distribution partnerships. [release]
Brazilian churrasco chain Fogo de Chão appoints Georgeanne Erickson as CMO. [release]
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