ChatGPT Ads See Change as OpenAI Expands Reach; AI Performs Well for U.S. Retailers

New Adobe data shows AI-referred traffic to U.S. retail sites is increasing in volume and converting at higher rates than traditional channels including paid search, per Search Engine Land. Separately, analysis from Search Engine Land argues that bottom-of-funnel content is outperforming in AI search environments because AI answers replace informational clicks, concentrating remaining traffic on high-intent queries.

Impact · This data reshapes the ROI calculus for content and SEO investment. Agencies managing retail or e-commerce clients should reframe AI traffic not as a threat to volume but as a quality upgrade. Content strategies weighted toward bottom-of-funnel — product comparisons, pricing pages, decision-stage guides — will capture disproportionate value from AI-referred visitors.

Action · Pull your clients' analytics to isolate AI-referred traffic (identifiable via referrer strings from ChatGPT, Perplexity, Gemini, etc.) and compare conversion rates against paid search and organic. Use this data to justify reallocating content budgets toward bottom-of-funnel assets.

U.S. search advertising generated $114.2 billion in revenue in 2025, remaining the largest digital ad channel, per Search Engine Land. However, growth slowed as advertisers shifted incremental spend toward newer AI-driven ad formats and platforms.

Impact · Search is not shrinking — it is maturing. For agencies, this means search remains the revenue backbone but is no longer the primary growth driver. New budget conversations with clients will increasingly center on where incremental dollars go (AI-native platforms, CTV, retail media) rather than how much more to pour into search.

Action · In upcoming client QBRs, present search as a 'maintain and optimize' line item and build a separate growth allocation framework for emerging AI-native and streaming ad channels where marginal returns are higher.

Netflix expects to double its ad revenue to $3 billion in 2026, per Marketing Dive. Its advertiser base grew more than 70% year over year in 2025, surpassing 4,000 advertisers. The company says it has 'room for growth' despite leadership changes and content library shifts.

Impact · Netflix's ad tier is transitioning from experimental to must-evaluate for media planners. A 70% advertiser base expansion means the platform is attracting mid-market and performance-oriented buyers, not just brand budgets. Agencies that haven't built Netflix buying expertise risk being bypassed as clients explore direct or programmatic access.

Action · If your agency hasn't run a Netflix ad-tier test, brief your media buying team on current inventory options, targeting capabilities, and measurement partnerships. A $3B revenue target means Netflix will be aggressively courting advertisers — use that leverage to negotiate favorable test terms.

Digiday reports that CPG companies are reversing nearly a decade of hiring practices, moving away from performance-marketing-focused marketers and recruiting brand builders who can revitalize brand equity. The shift reflects growing recognition that demand capture without demand creation produces diminishing returns — a theme echoed by Search Engine Land's analysis arguing that high ROAS often masks a failure to drive incremental growth.

Impact · This is a structural shift in client-side talent that directly affects agency relationships. Brand-builder CMOs will demand different work from agencies: more creative strategy, brand positioning, and upper-funnel measurement — and less dashboard optimization. Agencies over-indexed on performance media may find themselves misaligned with their clients' new leadership priorities.

Action · Audit your agency's service mix against this trend. If 80% of your deliverables are performance optimization, start developing or acquiring brand strategy and creative capabilities before client-side hiring shifts create a mismatch with your offering.