Google SGE could cost publishers $2 billion in ad revenue

Google’s Search Generative Experience may result in a substantial loss of advertising revenue for publishers, potentially amounting to $2 billion.

The AI-powered search engine is expected to trigger a significant decline in search traffic, ranging from 20% to 60%.

Such a steep drop in search traffic for publishers is likely to lead in a sharp decline in digital ad revenue, according to Marc McCollum, executive vice president of innovation at Raptive.

SGE study. Raptive, the company responsible for ad sales for titles such as Half Baked Harvest, MacRumors, and Stereogum, conducted two analyses to investigate the potential impact of SGE on search traffic: one in September 2023 and another last month. The company’s researchers compared Google’s current SERPs with the new SGE results for the top 1,000 keywords that bring traffic to their websites.

Results. The researchers noted that some keywords showed no SGE results, while other SGE responses did feature links to Raptive websites. Using an internal program to calculate expected click-through rates, Raptive concluded that there was an expected average traffic loss.

Search traffic decline. Commenting on his team’s findings, Raptive’s executive vice president of innovation, McCollum, told AdWeek:

• “When fully rolled out, SGE could result in a 25% decline in search traffic across its 5,000-publisher network.”

Why we care. Google SGE is expected to significantly affect publishers’ ad revenue, prompting a need to reassess ad revenue strategies. However, given that SGE is still in beta, it’s unclear how exactly it will impact ads. This uncertainty may pose challenges when trying to adapt strategies without knowing the specific changes.

Deep dive. Read our guide on how SGE could impact your search traffic for more information.