Pay-per-click (PPC) advertising and generative AI – potentially the sexiest topic we could come up with.
But it’s very relevant right now. The rapid evolution of AI-powered search engines is intrinsically changing how users seek information online. Traditional search engines, such as Google, rely on indexed web pages and keyword-driven ranking algorithms to present search results.
We’ve used these for years with no real problems. LLMs (large language models) have kicked the proverbial saloon doors in and are demanding our attention. They’re bigger, better and smarter than traditional search engines, offering contextual responses based on user intent, and delivering more conversational and personalised results.
Are they perfect? No, not yet, but they are getting more and more powerful seemingly by the day. Common LLMs include:
- ChatGPT (OpenAI)
- Perplexity AI
- Google Gemini
- Microsoft Copilot (Bing AI)
When you search for something, you’ll likely be greeted with an AI-generated response rather than your classic list of blue links, paid ads featured prominently at the top.
This fundamental change raises questions about the future of PPC advertising and how businesses should adapt to maintain visibility in this new environment.
How is the PPC landscape changing?
Traditional search engines displayed PPC ads right at the top (that’s the point, you’re paying to be featured first).
AI search engines have turned this on its head. Unlike traditional search engine results pages (SERPs), AI-generated responses prioritise direct answers, reducing the number of visible ads. This means that:
- Fewer ads are displayed
- Paid ads feature further down the page
- Organic click-through rates are decreasing (people are getting their answers from AI overviews)
As a result, businesses just like yours are having to reevaluate how they’re assessing the successes of their PPC campaigns and what performance metrics actually matter.
AI search and PPC performance metrics
AI-powered search is already influencing core SEO and PPC performance metrics, affecting impressions, CTR (click-through rate) and conversion rates. One of the most noticeable shifts is a decrease in overall ad impressions, as AI-generated responses reduce the frequency with which users see paid search ads.
Basically, AI overviews are answering users’ questions, meaning that they have no reason to click on your links.
This is a change that has raised some serious questions in PPC circles – if users no longer need to visit a website to obtain the information they seek, then the traditional conversion funnel is disrupted, and we’ll all soon be destitute and out of a job.
Right?
Not exactly. Rather than panicking and preparing for doomsday, marketers need to adapt (and pretty urgently). The first port of call: tracking whether users who interact with AI-generated results are still engaging with PPC ads, or are they bypassing ads entirely?
Competition for remaining PPC ad placements is already increasing, driving up cost-per-click (CPC). With limited ad space available, your business will need to refine its bidding strategy and focus on high-intent keywords to maximise advertising ROI.
AI’s role in PPC automation and optimisation
Now, AI isn’t all
Yes, it’s posing novel challenges, but forward-thinking PPC specialists are seeing opportunities in a world often full of bad news.
AI helps to remove much of the menial legwork from organising and optimising a PPC campaign. AI-powered tools can improve targeting, bidding strategies and ad copywriting, making campaigns more efficient and effective.
For example, Google’s Smart Bidding system uses machine learning to automatically adjust bids in real time, ensuring that you’re better optimising your spend. Similarly, Performance Max campaigns leverage AI to distribute ads across multiple Google platforms, while Responsive Search Ads (RSAs) use AI to generate dynamic ad copy tailored to user intent.
Beyond Google, AI-powered ad platforms like ChatGPT and Perplexity AI are emerging as potential PPC channels. These platforms could introduce new ways for brands to reach consumers through sponsored AI-generated responses.
You must not fight against AI, as that’s a fast track to failure. Marketers who embrace AI-driven automation are already seeing a competitive edge, as our campaigns are more targeted and cost-effective. Looks like it’s time to embrace our robot friends!
Strategies you can use to adapt to AI search changes
Here’s the good bit – what exactly can you do to improve your PPC results?
Focus on high-intent keywords
With AI-generated responses reducing the visibility of ads, focusing on transactional and high-intent keywords is more important than ever.
Search queries that demonstrate a strong purchase intent, such as “buy now” or “best price for,” will likely continue driving clicks (no AI is going to satisfy a user’s craving to purchase). You should refine keyword targeting strategies and leverage first-party data to identify high-converting search terms, then refocus your strategies to suit.
Experiment with AI-powered ad platforms
AI search engines are continuing to grow at a rather startling pace. This means that you should explore advertising on platforms that integrate AI-generated responses, such as Perplexity AI Ads and Microsoft Copilot Ads.
These platforms may introduce sponsored content opportunities directly within AI-generated responses, offering a new way to reach audiences (these features are currently in the works, but we expect to see them very soon).
Optimise ad copy for conversational queries
AI search engines rely on natural language processing (NLP), meaning user queries are more conversational.
To mirror this, you should ensure that your ad copy is structured in a similar way, incorporating question-based headlines and response-like formats to increase relevance.
Diversify PPC channels
To mitigate the risks of reduced visibility in traditional search ads, you should diversify your PPC efforts beyond Google. Consider investing in:
- Social media advertising (LinkedIn, Facebook and Instagram ads)
- Retail media networks (Amazon, Walmart Connect)
- Video advertising (YouTube Ads, TikTok Ads)
Invest in AI-powered ad automation
Google Ads and other platforms offer AI-driven automation tools that optimise performance.
As touched on earlier, AI allows you to enhance bidding strategies, improve targeting and generate AI-optimised creative assets. Your competitors will be automating this process. You run the risk of falling behind if you don’t!
Test AI-enhanced landing pages
With users engaging more with AI search engines, you need to ensure that your landing pages are optimised for AI-driven traffic. This includes:
- Conversational chatbots to assist AI-driven visitors
- Dynamically generated content that matches AI-suggested responses
- Fast-loading, mobile-friendly designs
Monitor performance metrics closely
Much of what we’ve talked about today is theoretical, based on our decades of PPC experience. We’re all learning this together.
As AI search evolves, we all must continuously track its impact on CTR, CPC and conversion rates. Regular A/B testing, adjusting bidding strategies and analysing search term reports will help refine PPC approaches in this changing landscape.
What does the future of PPC in AI search engines look like?
So, time for some hypotheticals – what do we think might happen in the next few years?
Well, for one, PPC is a HUGE revenue driver for search engines. Yes, they want to provide the best user experience, but they also want to make money, meaning that they’re not going to abandon PPC entirely. Instead, we expect that AI-driven ads will start to be integrated within AI-generated responses, allowing businesses to position their content within AI-powered summaries rather than through traditional ad placements.
Major search platforms such as Google and Microsoft are likely to adjust their PPC models to accommodate AI-driven search behaviour. This could lead to the emergence of new ad formats tailored specifically for AI search results, such as paid content recommendations within AI-generated answers or native advertising within AI search assistants.
Ultimately, if you only take one thing away from this blog, let it be this:
DO NOT REST ON YOUR LAURELS!
We’ve already seen that, by staying ahead of AI search trends and leveraging emerging ad opportunities, you can still drive results (we’re doing it right now for Catalyst and for our clients).
By embracing AI-powered automation, refining targeting strategies and experimenting with new PPC formats, you can and will remain competitive in an AI-first search environment.
Don’t get complacent, give our Search specialists a shout today. We’re here to talk through your existing PPC experience, helping you to develop a PPC strategy that’s prepared for the future. Book in a no-obligation chat by clicking the link below: