How Google's New AI-Powered Search Engine Will Affect Advertising and Business Strategies

Tech writers, including me, have been asking how Google will incorporate conversational AI into search. How will the new Bard conversational AI tool affect Google’s ad model? How will Bard get better?

We’ve been asking the wrong questions. In fact, Google aspires to change search completely using AI.

As reported originally in The New York Times April 16, Google is building an all-new search engine powered by AI. Code-named Project Magi, the effort will result in a more personalized search experience based on our search behavior.

Per The New York Times, the new search experience “would learn what users want to know based on what they’re searching when they begin using it. And it would offer lists of preselected options for objects to buy, information to research, and more. It would also be more conversational — a bit like chatting with a helpful person.”

And this caught my eye: reinventing search “would keep ads in the mix of search results. Search queries that could lead to a financial transaction, such as buying shoes or booking a flight, for example, would still feature ads on their results pages.”

This is important because one of the open questions about Bard is how Google will incorporate ads into conversational AI. Bard does not feature ads in its user interface, and ads generated $225 billion for Google in 2022. A lot of money is at stake. 

So, why the rush? It’s the OpenAI Effect. Once OpenAI released its ChatGPT tool into the wild, the impact was felt far and wide. Microsoft quickly unveiled a new Bing search tool powered by the same large language models that underpin ChatGPT. Microsft also increased its multibillion-dollar investment into OpenAI and announced the integration of ChatGPT into core Microsoft products such as Office.

Google – already developing large language models such as LaMDA – hit the panic button. Its AI investments were accelerated. Bard was pushed into the market before it was ready (and, in fairness, the same could be said about Bing). Google had good reason to declare a Code Red emergency: Samsung recently said it was considering replacing Google with Microsoft’s Bing as the default search engine on its devices. An estimated $3 billion in annual revenue was at stake with the Samsung contract. 

All of this comes with a big, big catch: the latest generation of conversational AI tools powered by large language models is still fraught with many problems such as – ahem – generating false and biased results. That’s why Google didn’t want to rush its own AI solutions into the market. 

It feels like we’ve entered the realm of 'shoot now and ask questions later'. Google has a big opportunity to be more proactive about how the company is making AI more responsible in search and beyond.

When Sundar Pichai, CEO of Google and Alphabet, announced the development of Bard on February 6, he wrote, “AI is the most profound technology we are working on today.” He also wrote,

It’s critical that we bring experiences rooted in these models to the world in a bold and responsible way. That’s why we’re committed to developing AI responsibly: In 2018, Google was one of the first companies to publish a set of AI Principles. We continue to provide education and resources for our researchers, partner with governments and external organizations to develop standards and best practices, and work with communities and experts to make AI safe and useful.

Pichai made those remarks in the last paragraph of that post. It’s time to move the narrative about responsible AI higher up in the story, and pronto

Meanwhile, we don’t yet know the full impact of Google’s efforts to make search more personal and conversational, but the impact on businesses could be profound. For instance, businesses will need to publish hyper-targeted content and conversational ads to be relevant to the more precise, conversational, and personalized search results that Google envisions.

Potentially the path from search to purchase will begin and end with one Google chat. This is not the reality today with Google’s Bard conversational AI tool, but it could be tomorrow.