Google’s 20-year miracle crumbled because of ChatGPT: ‘Ad engine’ was asked to split, the wave that shocked the $500 billion market was about to rise

Google has spent 20 years building the most powerful digital advertising machine in the world. Dismantling it could send shock waves through the $500 billion online advertising market, according to the WSJ. The above comment was made in the context of the US Department of Justice accusing Google of illegally operating an online advertising monopoly and calling for the destruction of parts of the company.

According to experts, the separation of Google’s advertising engine will give publishers and advertisers more choice and flexibility to reduce dependence on Google without worrying about suffering too much damage.

The Justice Department, led by Attorney General Merrick Garland, has accused Google of abusing market power in online advertising and seeking to control all aspects of the market. The regulator also asserts that Google plays a key role in ad attribution practices.

“ Google doesn’t have to compete with anyone. They simply set rules to eliminate their opponents, ” the lawsuit said. As a result, more creative advertising tools and technologies may not be born.

In response, Google denied all allegations, and said that the lawsuit was trying to “pick winners and losers in the highly competitive advertising technology field”. The company has hired many well-known lawyers to defend.

According to Rajeev Goel, co-founder and CEO of ad technology company PubMatic, this lawsuit, combined with many of the other legal battles Google is facing, will boost search engine leads. Google alternatives.

According to the lawsuit, Google’s advertising business has so far played an important role, trusted by 90% of major publishers. The advertising exchange also accounts for more than 50% of the market share. It is known that in recent years, Google has consolidated tools into a single product called Google Ad Manager. Along with the network and mobile advertising businesses, the company brought in $31.7 billion in 2021.

According to the WSJ, a number of major technology and media companies are stepping up their online advertising business and could accelerate by buying a part of Google’s system. Comcast, which owns the unit FreeWheel – one of the big companies in the business of selling video ads, is a prime example.

It is known that Google is no longer contributing the majority of total advertising revenue, for the first time in nearly a decade. The advertising business is still growing, but data from Insider shows that the pace is significantly slower than the rest of the market. According to internal analyst Zachary Goldner, the erosion of market share is mainly due to the fact that brands have the opportunity to access more ad formats.

“ All marketers want a lot of options ,” says Mr. Goldner.

Google isn’t the only giant affected. Meta Corporation has also been facing many headwinds in 2022, when people spend less time online than in the early days of the pandemic. Marketers fear recession, while ByteDance’s short-video app TikTok emerges as a new force in digital advertising.

In addition, the change in Apple’s privacy policy in 2021 is also one of the reasons why big companies are struggling. Previously, a Meta representative said that Apple’s change in the way advertising works on iOS applications will make it difficult for app makers and advertisers to track user behavior, thereby pushing Facebook to stand out. at the risk of losing up to $10 billion in revenue by 2022.

Not only that, Google itself is “panic” because of ChatGPT – a chatbot developed by Open AI and launched on November 30, 2022. This is a tool that ‘answer questions like a real person’, able to present logical, in-depth and extremely fluent ideas, even with complex questions. ChatGPT can even write scripts, write essays…

“ I turned on ChatGPT and wrote ‘OK, show me step by step details how the DBSCAN algorithm works’. It immediately showed me step-by-step ,” said Tobias Zwingmann, a teacher who teaches online AI courses. Notably, the lesson plan created by ChatGPT is surprisingly good quality. With just a little tweaking, Zwingmann was able to use the material for teaching.

This made Google recently forced to issue ‘Red Alert’ or ‘Code Red’, with the meaning: ‘Two hands on the keyboard! Even if employees have to work overtime, skip meals and sleep, they have to solve the problem.”

“ Maybe in a year or two, Google will be completely affected. AI will eliminate the search engine results page – where Google makes the most money ”, shared Paul Buchheit, one of the creators of Gmail.

However, according to insiders, this red alert is just a metaphor for the threat of the ChatGPT tool. The purpose of Sundar Pichai – CEO of Google when sounding this alarm is: ‘You must treat the ChatGPT threat as seriously as Google Search is down’. All to ‘wake up’ internal Google not to forget to win.

Via: WSJ, CNN