AI Search Ads Projected to Reach $100B by 2031

AI search advertising emerges as fastest-growing channel

Generative AI search is poised to become the advertising industry's fastest-growing investment category, according to new forecasts from WPP Media released June 16. The holding company projects AI search will capture 39.2% of all search ad revenue by 2031, up from just 1.9% this year — a trajectory that could generate $100 billion in annual revenue by decade's end.

ChatGPT began running advertisements less than six months ago, yet the nascent channel is already reshaping how agencies and brands think about search budgets. WPP Media estimates AI search will account for $301 million in ad revenue in 2025, with the United States commanding 60% of global AI ad spend.

Why it matters

This forecast signals a fundamental shift in how search advertising dollars will flow over the next seven years. Brands face strategic decisions about reallocating budgets from traditional search and e-commerce into AI-powered platforms where ad formats and measurement standards remain in flux. Early movers may secure competitive advantages in a channel that could reshape customer acquisition economics across industries.

Budget migration from traditional channels

Kate Scott-Dawkins, global president of business intelligence at WPP Media, told Digiday that the growth will come from multiple sources. Advertisers are expected to transfer spending from both traditional search platforms and e-commerce budgets into generative AI ad options.

"It might capture a larger share of incremental growth than other channels, because it's new and it's exciting," Scott-Dawkins said. "Some of it transitions from traditional search. Some of it potentially contributes to a deceleration within commerce."

The forecast remains subject to significant variables, particularly how Google develops its search business. Currently, brands cannot buy ad space exclusively adjacent to AI Overviews or opt out of the format entirely. Scott-Dawkins acknowledged the projections represent "an exercise in modelling an abstraction of reality."

Advertiser appetite and expansion

ChatGPT ads have been available in the United Kingdom for two weeks, and as OpenAI and Google expand ad-supported AI experiences to additional markets, investment is expected to accelerate. John Barham, managing partner at performance agency Roast, noted that brands are eager to establish presence in new digital real estate before competitors do.

Andy Arnett, head of search at media agency Incubeta, which is currently testing ChatGPT campaigns, explained the appeal: "AI search can understand far more than a traditional keyword query: the conversation, the user's intent, the decision criteria and, over time, potentially broader personal-agent signals."

Broader market context

WPP Media forecasted global ad revenue will climb 8.9% in 2026, while media consultancy Madison & Wall projected 8.3% growth. Madison & Wall estimated search would account for 9.3% of growth in global ad revenue this year, reaching $298 billion and making it the third-fastest growing channel behind social and commerce.

Arnett cautioned that growth is not guaranteed, warning that "a major scandal around unsafe AI answers would slow spend quickly." For OpenAI specifically, the challenge lies in proving advertisers can track, optimize and scale performance without compromising brand safety or user trust.

These details were first reported by Digiday.