"AI Overviews"—Google's latest offering is set to completely overhaul the web as we know it

By integrating AI-generated answers in its search results, Google is ushering in a paradigm shift.

Googles Search-Chefin Liz Reid bei der Google IO 2024

At first glance, "AI Overviews," Google’s latest product that offers AI-generated summaries within search results, may seem trivial given the prevalence of ChatGPT et al. Upon further inspection, however, its ramifications could shake up digital value chains everywhere. Today, OMR is breaking down what "AI Overviews" are and explains why everyone from media to online retail should take note.

"We are here together with another transformative moment, perhaps the most transformative yet," said Google's Chief Business Officer Philipp Schindler at the "Google Marketing Live" in-house exhibition last week. "And of course, I'm referring to the new era of AI." A week before that, CEO Sundar Pichai unveiled completely redesigned search results pages at the Google IO developer fair: "AI Overviews", i.e. answers to search queries created using generative AI, which Head of Search Liz Reid summed up as "Google does the Googling for you."

"Answer ten questions at once"

It’s all apparently possible with the latest iterations of Google's Gemini. With its help, Google not only wants to be able to answer simple questions ("What’s the best way to clean a sofa?") directly without having to redirect to another website, but also introduce "multi-step reasoning," i.e. answering bundled search queries, such as: "Find the best yoga or Pilates studio in Boston and show me information about their new customer offers and their distance from my address." According to Google, the official market launch of AI Overviews began in the USA last week, with other countries to follow. The function is set to be rolled out to more than one billion users by the end of the year.

"Featured Snippets" cut into traffic

AI Overviews represent the latest measures in Google's transformation from a search engine to an answer engine, a process that began more than ten years ago. With the launch of "Knowledge panels," "Featured snippets" and "Answer boxes," Google started to actively display information directly in the search results.

This information is typically sourced from other websites, such as Wikipedia. And the ramifications can be significant for third-party sites, which can suffer a major loss of traffic if Google displays their content directly in the search results. In theory, website operators should be able to decide for themselves if Google may display this information directly in the search results. However, Google has not always played nice and adhered to such agreements, causing existential hardship for the respective website operators.

How compatible is AI with Google's core business?

Google first announced AI-generated answers within search results at last year's Google IO, calling it "Search Generative Experience." However, users were required to activate these by applying for a beta test and participation was initially only reserved for users from selected countries. It was not until November that Google rolled out the product in 120 countries—still as a test.

For several months, industry representatives speculated whether Google would roll out the "Search Generative Experience" to the general public. Partly because the company's business model relies on redirecting potential customers to the stores and websites of paying advertisers. Skeptics argued that if users no longer click on ads in the future, or at least less frequently, because they receive many responses from Google itself, the company will be cannibalizing its own business.

Backlash from users

However, at last week’s "Google Marketing Live" event it was plain to see that Google believes in the potential of advertising in AI answers, fact that advertising boss Vidhya Srinivasan alluded to in the new "AI Overviews." Anyone using Google to find out how to clean a couch could, for example, be shown ads for cleaning products; anyone looking for ways to keep clothes wrinkle-free without an iron could see ads for a "anti-wrinkle," according to the example cases shown by Google.

The fact that Google now wants to roll out "AI Overviews" to one billion users and also display ads in the AI summaries is seemingly the final indicator that Google is serious about revamping its core source of income—despite heavy backlash from users, for example. Users are complaining publicly on social media platforms that Google is foisting the new function upon them (SEO expert Lily Ray has receipts on X.)

AI Overviews will be "catastrophic"

One reason for user dissatisfaction is that AI answers tend to lack the quality and relevance expected by users. With "AI Overviews," Google has advised users to drink urine to remove kidney stones and to suck out the poison yourself if you’ve been bitten by a rattlesnake. As a result, users are starting to search Google for a way to disable the new feature, according to traffic monitoring website Similarweb and even Google Trends.

However, end users are not the only ones displeased—publishers, too, are weary and critical of AI responses. " This will be catastrophic to our traffic," says Danielle Coffey, President & CEO, News/Media Alliance, a US association that represents the interests of more than 2,000 daily newspapers and magazines. In a recent piece by the Washington Post, several bloggers and website operators opened up about their concerns of no longer being able to attract visitors via Google's search engine.

"I care deeply about [the web]"

While, officially, publishers have the option of deciding themselves whether their content is evaluated for "AI Overviews," it does not figure to prevent a potential drop in traffic as "AI Overviews" will be displayed either way.

So is Google possibly ushering in the death of the open web? "I care deeply about it," Google CEO Sundar Pichai recently told The Verge. “I recall, in 2010, there were headlines that the web was dead.” Pichai remains optimistic, “In fact, if you put content and links within AI Overviews, they get higher clickthrough rates than if you put it outside of AI Overviews.”

"Search ads are an 'experience'"

But it's not just publishers who could see profound changes as a result of AI overviews. Advertisers will also have to observe whether the ads in the AI responses generate clicks just as pre-AI Overviews, or whether the number of clicks decreases as users get used to having their queries addressed directly by Google.

That may also be a cause of concern for Google. In any case, Google clearly wants to try to house an even larger part of customer acquisition and purchasing decisions on its own platform. "Imagine a world where every search ad is more than an offer—it’s an experience," said Product Manager Sylvanus Bent during "Google Marketing Live."

An even bigger blackbox?

Companies may still be able to interact with their customers within a given ad, for example, a company that rents short-term storage space to private individuals could make it possible for potential customers to upload photos of their home, including furniture, within their Google ad in order to obtain an estimate of the space required.

It remains to be seen how open advertisers will react to additional aspects of purchasing decisions to be outsourced to Google's platforms, as advertisers are dependent on the data supplied by Google and cannot independently measure the success of their measures. Google's last major innovation in the advertising business were the so-called "Performance Max" campaigns. Here, companies can simply define their target, provide Google with data and images of their products and Google "optimizes" the placement itself—across all of Google’s inventory. The industry medium Adexchanger described "Performance Max" as the "darkest black box of all Google advertising products."

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Scott Peterson
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