Start Your AI Search Engines; Instagram = Insta-Growth

Hey, everyone! Today is the last edition of AdExchanger’s daily newsletter for 2024. We’ll be back on January 2nd. Thanks for reading and I wish you an amazing, relaxing and healthy holiday season.

2025 will be a year of serious changes – and drama. We’ll be here for it.

A new generation

Google plans to create an “AI mode” for its web search engine users, which would essentially change the search experience of the Google Gemini generative AI chatbot, Information reports.

People will have to affirmatively switch to AI Mode via a tab option, like they do for Shopping, Images or News. But the plan still represents a big potential expansion of Google’s generative AI search, which got off to a bit of a rocky start earlier this year in the form of AI Preview.

Since October, AI Reviews reach more than 1 billion global users every month, according to Google.

By comparison, OpenAI CEO Sam Altman said its generative AI engine is now reaching 300 million people a week.

Creating an AI mode is another way Google is currently increasing the distribution of its generative AI search. YouTube could quickly make Shorts, its TikTok clone, a huge monster — now with more than 70 billion views a day — because YouTube prominently places Shorts videos in most people’s normal YouTube feeds.

As Google pulls the levers for its own reasons, what’s certain is that developers and publishers who rely on Google Search — good old Google Search — will be pushed further down the results page, or perhaps off it altogether.

Do it for Gram

“When the big one falls, the four small ones move.”

Okay, so maybe that phrase isn’t a powerful maxim as much as a throwaway joke from an episode of “30 Rock.” But certainly, the social media vultures now circling TikTok as it faces a looming ban hope it’s true.

Not that TikTok’s competitors can be considered “small.” According to eMarketer, Instagram is projected to account for half of all Target ad revenue in the US in 2025, totaling $32.03 billion. Adweek reports.

The ban could allow Instagram to capture more than a fifth of TikTok’s current $12.43 billion in ad spending, which is likely why Instagram has been working hard to recruit creators and roll out new features.

But even if Tiktok earns a temporary reprieve from execution, Instagram still appears to be on track to capture more market share.

In fact, Instagram already generates almost double the ARPU of TikTok, $223 compared to $109. (Facebook actually, for the record, earns an average of $191 per user.)

Purchased

Shopify has reached a stage of growth where it is starting to threaten many of the startups that provide the software add-on that Shopify offers to its merchants.

This is like “walking a tightrope”, like Information puts it.

It’s a famous story. Big companies like Google, Snowflake, Amazon and AWS have all been through it.

Currently, Shopify’s growth ambitions most impact shipping, customer service, and shipping insurance providers. But the same could become true for ad tech and marketing services.

For now, however, Shopify has taken a hands-off approach, allowing several partners, including Google, Meta, Amazon and Criteo, to benefit greatly while it benefits relatively little.

Klaviyo, for example, is built on top of Shopify, and Shopify was Klaviyo’s pilot investor (and remains a large post-IPO shareholder).

Shopify takes a risk in competing with its add-on services. Some big brands prefer not to consolidate, while retailers and customers may prefer more options, like multiple checkout features, for example.

But for Shopify, those one-time partners may soon start to look like low-hanging fruit.

But wait! There’s more!

The uncertainty surrounding TikTok’s future in the US is creating a rift between creators and agencies: some see it as inevitable, while others are convinced it won’t last. [Digiday]

Reporters Without Borders called on Apple to end the artificial intelligence feature that generated a false headline about a person accused of murdering the CEO of UnitedHealthcare. [BBC]

Malaysia will require social media platforms such as Facebook to obtain licenses in the country by next year. [Bloomberg]

Apparently it is possible to get around some LLM restrictions by typing AS SPONGeBOB mEmE. [404 Media]

You are employed

Omnicom Appoints Katie Klein as Chief Investment Officer. [Adweek]