AI-driven search advertising potential to hit $25 billion by 2029 prediction.
New and Improved AI-Powered Shopping Experience
Get ready for a shopping revolution! AI-powered search results are on the rise, and it's all thanks to innovations like Shopify's Catalog API. This technology allows for AI-generated shoppable responses, transforming the way we shop online. It's not just about browsing products anymore; it's about having a personalized shopping experience right at your fingertips.
In this new realm, agents like ChatGPT and Amazon's "Buy for Me" are leading the charge. They can research, refine, and even checkout items all within one conversation. This shift towards a more interactive shopping experience is a game-changer, and it's just the beginning.
But what about the numbers? Well, while the exact figures from EMARKETER aren't disclosed, AI search advertising is predicted to reach an astounding $25 billion by 2029. That's a whopping 14% of all search budgets, folks! This growth is fueled by technological advancements and the integration of AI into commerce platforms.
From Traditional to Conversational: A fundamental shift
Unlike traditional search ads, these new AI search ads will be embedded directly within conversational responses. This represents what EMARKETER defines as "sponsored answers, brand mentions, and affiliate links embedded in AI-generated summaries or conversational responses."
For AI agents to rank or surface "sponsored" suggestions effectively, they need enriched product titles, detailed attributes, and real-time inventory status. Shopify's Catalog API, launched during their Summer '25 Edition rollout on May 21st, provides a machine-readable feed of every product published on Shopify. This enables discovery apps like ChatGPT, Perplexity, or Copilot to pull titles, prices, stock levels, taxonomy, and enriched attributes in real-time, no scraping required.
The New Adoption Curve: A Hockey-Stick of Media Growth
The trajectory of AI search advertising follows a familiar pattern in digital advertising evolution. Retail media took approximately five years to reach similar scale, while search and social advertising each required longer timeframes. AI search appears to be on track to match retail media’s rapid adoption curve.
In an Adobe survey of 5,000 U.S. consumers, 39% have already used generative AI for online shopping, with 53% planning to do so this year. Shopping tasks consumers are using AI for include research, receiving product recommendations, seeking deals, getting present ideas, finding unique products, creating shopping lists, and more.
Navigating the Challenges: A Brand's Journey
Brands and agencies buying media need to treat product data and media strategy as interconnected priorities. Success requires treating Shopify metafields, product descriptions, and structured data not as IT chores but as performance-media inputs. Moreover, retailers must choose strategic paths as they participate in conversational commerce: self-built shopping agents, walled garden approaches like Amazon, or multi-merchant platforms like Shopify's partnership with Perplexity. These decisions will significantly impact a brand's AI search advertising strategies.
Measuring the Unmeasurable: A New Era of Attribution
The emergence of AI shopping agents introduces new challenges in measurement, further complicating the already problematic retail media attribution problems. Traditional budget categorization breaks down when transactions begin in conversational interfaces and complete through various checkout systems. Marketers will need new frameworks to track and optimize spending across these platforms as they evolve.
Embrace the Future: Be Adaptable
Brands that treat product data and media strategy as connected priorities will be better positioned as AI search advertising scales. Those who continue managing AI initiatives separately from their core commerce operations may find themselves at a disadvantage as conversational search becomes more prevalent. Innovations like Shopify's Catalog API and standards like Anthropic's Model Context Protocol (MCP) are creating a more connected and seamless shopping experience. Brands that adapt and thrive in this new landscape will be the ones to watch.
Investing in technology and finance sectors could prove profitable as we move towards an era of AI shopping. The integration of AI into retail media and advertising platforms, such as Shopify's Catalog API, is expected to grow significantly, reaching an estimated $25 billion by 2029. Brands and agencies need to treat product data and media strategy as interconnected priorities to navigate this shift, especially as AI shopping agents like ChatGPT, Amazon's "Buy for Me", and more become more prevalent in conversational commerce.
