"The AI ad race is on," said our analyst Nate Elliott during EMARKETER's Ad Buyer Strategies Summit. "But it doesn't look like you might think."

US AI ad spending is expected to reach $32 billion this year and will exceed $68 billion by 2030, according to our May forecast. But despite OpenAI's ambitious goal of generating $100 billion annually in AI ad revenue by 2030, the market is evolving differently than platform executives anticipated. The majority of AI advertising dollars aren't flowing into chatbots like ChatGPT, they're going to traditional search ads that happen to appear next to AI-generated content.

Nate Elliott speaking at EMARKETER's Ad Buyer Strategies Summit.

AI adoption is reshaping consumer behavior

ChatGPT has become one of the five most-visited websites globally, surpassing Amazon and outpacing major social platforms including Reddit and X, according to Elliott.

The primary driver behind this growth is straightforward, he said: People use AI platforms to search for information. Elliott unveiled EMARKETER's "building blocks of AI adoption" analytical model, which examines the human motivations behind AI usage rather than specific platforms or features.

"Most of the people going to AI platforms are using it for search, most of the people going to search engines are seeing AI responses," Elliott said.

However, despite aggressive market forecasts predicting AI will cannibalize traditional search, Elliott said the data tells a different story.

"Even as AI adoption has soared over the past three and a half years, the number of people searching on Google and the amount of time they spend there every day has gone up, not down, not even flat," said Elliott. "People who use AI regularly tell us that they are more likely than average to go and search things on Google several times a day."

This complementary relationship between AI and traditional search fundamentally changes the advertising landscape. For AI to reach the most optimistic industry forecasts, Elliott said two conditions would need to be true: AI would need to replace search entirely, and ads in AI would need to be the most effective form of advertising ever created. Neither is happening.

OpenAI initially charged $60 CPMs for ChatGPT ads, equivalent to Super Bowl advertising rates. "There's a reason the deli on your corner doesn't advertise in the Super Bowl, and it's the same reason they're not going to pay $60 CPMs to advertise on ChatGPT either," Elliott said. "The ad prices will go down."

Most AI ad spending goes to traditional search placements

The composition of AI advertising spending reveals a surprising reality: In 2026, 82.5% of the AI ad market in the US will be "AI search adjacent ads," traditional Google paid listings that appear on search results pages next to AI overviews, per our forecast.

Even by 2030, AI-adjacent advertising will represent 58% of all US AI ad spending, while chatbot ads will grow to just 8%.

The remaining growth will come from ads within conversational search, what Elliott calls "AI mode," when users type prompts directly into Google's AI mode rather than switching to a dedicated AI platform. He said this category will expand significantly over the next five years but still won't overtake traditional search placements.

The biggest opportunity for advertisers isn't in new, experimental AI chatbot placements, it's in optimizing traditional Google paid search listings that appear alongside AI-generated content. This reality may seem counterintuitive, but it aligns with how consumers actually use AI: as a complement to, rather than replacement for, traditional search.

Three strategies for marketers

Elliott outlined three key approaches for marketers as the AI advertising market matures:

1. Balance paid and organic strategies. Until ads become widely available across AI platforms, organic visibility remains crucial.
2. Partner with creators for organic rankings. Traditional SEO and generative engine optimization (GEO) strategies focused solely on owned web pages are insufficient. Large language models prioritize what others say about brands over brand-generated content. Tapping into the creator marketplace will be essential for strong organic rankings in AI engines.
3. Let paid search teams lead AI advertising efforts. Teams that have spent years perfecting Google paid listing strategies, targeting the right keywords with optimized copy and landing pages, possess the most relevant expertise for the current AI advertising landscape.

“The biggest opportunity for ad buyers is traditional Google paid listings, and it doesn't make a lot of sense, but that's where we see the market going, because that's where we see consumer behavior going,” said Elliott.

Watch the full session.