One Man Conglomerate, #03. As a result, the paradigm of the market will change significantly. [PART III]

The following is English version of Chapter 2 of ‘One Man Conglomerate’, published in August 2023 by Do-Jeon, Marcus, Jeong.

 

2nd Chat: How will our lives changes?

 

#03. As a result, the paradigm of the market will change significantly.

 

[09] The search advertising market will be reorganized around AI chatbots.

 

The emergence of AI chatbots, including ChatGPT, will cause a seismic shift in the search advertising market, which is currently dominated by Google. Of course, there are those who say that the AI chatbot market and the search ad market are different and will have little impact.

In a way, this is true. After all, we don’t currently use ChatGPT to search for a local restaurant. But it’s not that simple. AI chatbots aren’t going to stay focused on essays and coding forever. If AI chatbots were to search for and provide local information, the number of users (or frequency of use) of traditional search engines would likely decrease significantly, because unlike traditional search engines, AI chatbots will only provide information that is tailored to the user’s needs.

This will greatly reduce the existing search advertising market because AI chatbots scrape the information requested by users from web pages and do not bring in advertising banners such as Google AdSense or Naver Adpost. In other words, ad windows on web pages with such information will not be exposed to AI chatbot users at all. Of course, in response to this, existing search engines could implement the same search function as ChatGPT, but the advertising effect will be significantly reduced.

So if traditional search engines don’t find a suitable alternative, advertisers will move to other mediums (e.g., LLMs like ChatGPT or Bard, YouTube, etc.). No advertiser wants to waste money on a medium that is not effective.
Some believe that this market shift will lead to the demise of both the traditional “search engine” and “search advertising market”.

 

Image: developed by Midjourney

 

 

[10] The power of domestic portal businesses will weaken.

 

Even if Google’s influence is removed, domestic portal sites such as Naver and Daum will be less profitable than they are now if AI chatbots like ChatGPT invade the search ad market. Of course, portals will not disappear immediately, as there are still revenue models that can be linked to them, and the generations who prefer it are still alive.

However, this state will not be able to continue.

So they’re going to try to come up with realistic alternatives. They’re going to try to diversify their revenue model, which is currently primarily based on search advertising. They will also try to future-proof their corporate governance and decision-making processes. Otherwise, the portal’s position will be significantly weakened.

 

 

[11] So the power of YouTube will be stronger.

 

Even before ChatGPT was introduced, YouTube was all the rage in South Korea. The number of people searching for information on YouTube has also increased rapidly.

Specifically, according to Opensurvey’s ‘Social Media and Search Portal Trend Report 2023’, the platforms used to search for information are Naver (94.3%), YouTube (87.5%), KakaoTalk (82.8%), Google (77.7%), Instagram (61.8%), and Daum (46.9%), and YouTube is growing rapidly.

So when it comes to online (or digital) advertising in South Korea, it’s all about YouTube. This is a fact that everyone in the industry knows without having to prove it with statistical data.

However, there’s a hot new ingredient that’s set to reinforce this trend. ChatGPT is that ingredient.

ChatGPT is an almost perfect material for YouTube. This is because ❶ ChatGPT is a new material that people around the world are interested in, so ❷ Many creators are uploading related videos very quickly. In addition, because ❸ the speed of technological advancement is so fast, new information pours in all the time, and ❹ this interest spreads to other generative AIs, content will be produced without drying up. In other words, it is not a one-time thing, but a material that will continue to attract people’s attention in the future. As a result, ❺ this will increase the time spent on YouTube (which includes users), and ❻ advertising revenue will also increase.
And, of course, it is not unlikely that, due to ChatGPT, ❼ some advertisers from the traditional search ad market will move (or switch) to YouTube.

 

[ Attention ]

The above article excludes footnotes and details, unlike the actual book.
Please read the following post for details of “#03”

위 글은 정도전 작가가 2023년 8월에 출간한 ‘1인 대기업(One Man Conglomerate)’의 챕터2 영문 버전입니다.