Redefining search in the AI age: Threats, myths and market realities
Andy Macdonald, national head of digital at Carat, argues that search is not "dead" as some suggest, it is instead transforming.
When Microsoft’s ANZ CTO recently declared “search is dead” at the recent Humain conference, it triggered a headline splash across the trade press that felt more like provocation than prediction.
Yet in the attention economy, headlines win. While it makes for great theatre, this declaration is neither reflective of the current market nor the lived behaviour of billions of users around the world.
Search is not dead.
It’s transforming, rapidly and fundamentally, but the numbers suggest it’s very much alive and, for now, still dominant.
Google Search: Still a giant in transition
Let’s look at the facts. In Alphabet’s latest global earnings call, Google Search revenue was up 9.8% year-on-year. This growth isn’t just an inflation story — it reflects sustained demand from advertisers and ongoing volume of usage. Generative AI overviews now appear in 30% of all search queries, but rather than cannibalising traffic, Google is using AI to enhance its search experience and defend its core business.
We’ve seen search evolve many times before, from keyword-matching to semantic understanding, and now from link-based results to generative responses.
This isn’t an obituary; it’s another adaptation.
The AI threat: Real, but not existential — yet
The threat from AI platforms like OpenAI’s ChatGPT and Anthropic’s Claude is real and rising, but still dwarfed by the scale of Google.
ChatGPT currently has approximately 120 million daily active users and approximately one billion queries per day.
Compare that to Google Search’s 14 billion daily queries and you begin to see the gap. ChatGPT is not replacing search; it is complementing it for now, carving out new use cases in content generation, summarisation, and creative ideation.
The shift is measurable, but it’s not a cliff.
Google still commands over 90% of global search market share (91-92% in Australia). The real question is not whether Google’s dominance is under threat, but whether its monetisation model is future-proofed.
Follow the money: What’s driving revenue growth?
Here’s where it gets interesting. Google’s 9.8% Search growth has less to do with increased query volume and more to do with higher cost-per-click (CPC) prices and the ongoing shift to performance-led formats.
AI-powered campaign types like Performance Max, Demand Gen, and Smart Bidding have driven increased advertiser spend through improved ROI, more automation, and stronger budget scalability.
In other words, Google isn’t growing because people are searching more — it’s growing because advertisers are paying more per search.
This raises another concern. As CPCs climb and incrementality becomes harder to isolate, advertisers are starting to demand more transparency and measurement rigour, especially in an era where media budgets are under pressure.
The Apple question: Safari, search defaults and AI search
Recent data points to a weakening grip for Google in certain ecosystems.
Apple’s Eddy Cue (SVP, Services) revealed the DOJ’s antitrust trial that Google Search usage in Safari declined for the first time in 22 years. Apple, who earns around $19 billion a year through their search default deal with Google, is now actively exploring an AI-powered alternative. Gemini, Google’s new model, is reportedly not even in the running due to “unacceptable terms”.
It’s a risky moment.
Google is defending its position from two sides: partners who are incentivised to disrupt (like Apple), and competitors who are innovating faster (like OpenAI and Anthropic).
Anthropic’s Claude now includes a live web search API with cited sources.
That moves it from chatbot to research assistant, posing a real threat to traditional search engines.Meanwhile, OpenAI has begun integrating shopping experiences directly into ChatGPT, complete with buy buttons and product recommendations based on user preferences. It’s evolving into an intent-driven commerce platform.
If AI can collapse the funnel by combining discovery, consideration, and conversion in one interface, the ripple effect across search advertising and affiliate ecosystems will be profound.
Andy Macdonald
Google fights back: GML 2025 and I/O Conference announcements
Over the past week we have seen significant announcements. Google Marketing Live 2025 unveiled dozens of ad innovations. Google will now show ads in its AI Overviews and AI Mode search features on desktop, and has launched a new “AI Max” tool that extends any Search campaign with AI-driven keyword expansion and creatives.
These are great announcements for advertisers, but will Google maintain consumer relevance?
At Google I/O 2025, many announcements focused on search itself. Google opened up its AI Mode in search (earlier in beta) to all US users, and added deep-query tools like ‘Deep Search’ for in-depth answer. It previewed Project Astra: Search Live, which will let users converse with search using their camera in real time.
The stakes have never been higher and Google are applying their latest AI in very corner of search, from mobile queries to shopping experiences in the hopes of maintaining market dominance.
Impact on advertisers: Welcome to the Algorithmic Era
This isn’t just a search story. It’s a signal that we are firmly in the Algorithmic Era of Marketing.
As AI platforms replace the index-based internet with conversational interfaces, we must ask: how do brands show up in a world without index search results?
Traditional SEO may be less relevant in generative experiences, meaning publishers, retailers, and marketers will need to adapt quickly. Structured content, metadata, and semantic clarity become critical for surfacing in AI-driven outputs.
From a media planning lens, we’ll need to rethink how discovery, intent, and action are modelled. AI chat platforms don’t currently run ads at scale, but they will.
And when they do, expect a new generation of contextual, personalised, and memory-based ad formats to emerge.
Google’s not dying, but it faces unprecedented challenges
Search is not dead.
Google remains the leader, but is no longer unchallenged. The shift toward AI-driven discovery is not an overnight change. It’s been close to 2.5 years since ChatGPT launched to the world. This will likely be a slow, seismic change that challenges assumptions about what search is and how brands reach people.
Advertisers and agencies need to prepare for a future where answers are generated not indexed, and brand influence begins before a query is even typed.
In this future, attention belongs to those who adapt first.
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Google is still enormous, yet the foundations are wobbling. Its share of global search has now dipped below 90 per cent line in 5 of the last 6 months and for the first time in almost a decade, which is largely attributed to the sudden popularity of AI-first tools and “answer” engines.
Behavioural data tells the real story: when Google’s AI Overviews or the newly rolled-out AI Mode appear, external clicks collapse. A MediaCat user-tracking study found outbound traffic dropped by as much as 66 per cent when an AI Summary surfaced, while a multi-source CTR audit logged a 54.6 per cent fall in organic clicks on queries that triggered an AI box. Press Gazette’s early tests of AI Mode show links relegated to a skinny side panel, making it even less likely a user will visit a source site.
So, yes, Google’s revenue is still climbing, but it is doing so by charging advertisers more for every shrinking slice of user attention, not necessarily because people are searching more. As news-SEO veteran Barry Adams puts it, “the web has gotten so bad that a mechanism allowing users to enjoy the web’s output without having to engage with its crap is going to become the default.” AI Mode is that mechanism, and its early metrics already undermine some of the optimism in Macdonald’s take.
Zero-click searches are going to be very much the default and it’s something that both brands and publishers will have to grapple with.
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