Click-Bait No More: How AI is Reshaping Marketing

The rapid integration of Generative AI (GenAI) tools in online search engines, such as Google’s AI-generated summaries which provide concise answers directly in search results, is significantly transforming the marketing and advertising landscape. This development necessitates a re-evaluation of existing strategies and highlights new opportunities for acquisition and investment in specialised firms. Here, we explore the key implications of this change on marketing practices (especially, SEO and PPC) and identify potential acquisition strategies for private equity (PE) and large industry players.

Implications of AI on SEO and PPC

  1. Decreased Organic Traffic and Click-Through Rates: With AI-generated summaries providing quick answers directly on search results pages, users may find less need to click through to individual websites. This change is expected to decrease organic search traffic significantly. Gartner predicts a reduction in organic search traffic by 50% or more by 2028 due to the adoption of GenAI-powered search​. However, it is important to note that GenAI-powered searches are still up to 10x more expensive than standard keyword searches, suggesting that the shift away from keywords will be gradual.
  2. Focus on Content Relevance and Quality: Traditional search advertising is becoming more about behavioural targeting than precise keyword optimisation due to search engines relying on its AIs to match the user with the best paid and organic content even if keywords do not exactly match. This shift means advertisers need to focus more on visibility and placement rather than the exact wording of their ads.
  3. Keyword Strategy Adjustments: Businesses need to focus on long-tail keywords and informational queries, as AI summaries are more likely to appear for these types of searches. This requires a more nuanced approach to keyword research and content creation, which can be hyper-personalised  for both B2C and B2B. GenAI tools like ChatGPT and DALL-E can significantly reduce the time and cost associated with traditional content creation processes, enabling marketers to quickly test and iterate on new approaches across different marketing activities.

Adapting Marketing Strategies

Marketers must adapt their strategies to align with the changing landscape brought about by AI summaries:

  1. Optimising for AI Inclusion: To increase the chances of being included in AI summaries, content must be clear, factual, and well-structured. This involves using concise language, bullet points, headings, and incorporating structured data to appeal to AI algorithms.
  2. Focusing on Long-Tail Keywords: With AI summaries often triggered by detailed informational queries, focusing on long-tail keywords can improve the likelihood of content being included in these summaries.
  3. Monitoring and Analysis: Utilising SEO tools to track the impact of AI summaries on traffic and rankings is crucial. This allows for timely adjustments to strategies, ensuring that any negative impacts are mitigated and positive outcomes are maximized.
  4. Creating High-Quality, Evergreen Content: Content that remains relevant over time is more likely to be featured in AI summaries. Investing in evergreen content ensures that the information provided remains useful and accurate, increasing the likelihood of inclusion.
  5. Leveraging Multimedia: Incorporating various forms of media such as videos, infographics, and interactive content can make the content more engaging and improve its chances of being picked up by AI algorithms.

Opportunities for Brand Visibility

While AI summaries might reduce traffic to individual sites, they also present new opportunities for brands to increase their visibility:

  1. Featured Content: Brands that consistently produce high-quality content may find their information featured in AI summaries, increasing their visibility and perceived authority as a leader in its field.
  2. Building Trust and Loyalty: By providing concise and accurate information quickly, brands can enhance user experience, potentially fostering trust and loyalty. Users are more likely to return to sources they perceive as reliable and efficient.
  3. Enhanced Social Proof: Being featured in AI summaries can act as social proof of a brand’s credibility and expertise. This can be leveraged in marketing campaigns to attract a larger audience.

Planning for the Future

Given these changes, certain types of firms and skillsets are becoming particularly valuable acquisition targets:

  1. AI and Data Analytics Marketing Specialists: Companies specialising in AI-driven marketing solutions and data analytics are prime targets given the niche expertise that is required to effectively navigate the changing technology landscape and leverage GenAI for personalised insights, efficient ad targeting, and effective marketing campaigns.
  2. Content Automation Platforms and CX Specialists: Firms that provide content automation tools, which use GenAI to generate marketing copy, visual content, and even video at scale, are increasingly attractive. These platforms help marketers maintain a high output of personalised content with reduced manual effort. However, it is crucial to understand which tools have a ‘right-to-win’ because the Martech landscape is increasingly saturated – more than 2,000 new Martech tools launched in the second half of 2023, of which more than 70% were powered by AI.
  3. Training and Implementation Consultants: As businesses adopt GenAI tools, the need for training and implementation support grows. Firms that specialise in helping companies integrate and optimise AI technologies can offer critical services, making them attractive acquisition targets.

Conclusions

The rise of AI in online search is reshaping the marketing and advertising landscape – while it may reduce direct traffic, it also offers an avenue for enhanced visibility and credibility. This paradigm shift emphasises the need for innovative strategies and advanced technological capabilities in order to maintain and grow online presence.

Firms with strengths in AI, data analytics, content automation, and customer experience are well-positioned to thrive in this new environment, making them particularly interesting targets for PE firms and larger industry players looking to stay ahead of the curve. For example, PE-backed companies such as Brainlabs have been highly active in acquiring digital marketing specialists (Fairgrove has supported numerous bolt-on acquisitions). Similarly, global companies like WPP and Publicis Groupe have been expanding their capabilities through strategic acquisitions in the digital marketing space, underscoring the industry’s ongoing consolidation trend.

This shift is reminiscent of past M&A trends in the industry, such as the wave of e-commerce marketing specialist acquisitions during the rise of Amazon, bolt-ons of social & influencer marketing and multi-channel network boutiques with the growth of social media, and the need for data-driven marketing capabilities during the big data boom. While the costs associated with AI-powered searches are still high, current players in the industry must plan ahead and consider their investments accordingly.

If you would like to discuss this article or our broader experience in Marketing (digital, influencer, multi-channel network, affiliate), Martech, and Media, please contact Viesturs Bemhens.

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