Twenty-nine percent of online traffic to news sites and 38% of new subscription conversions are at risk if tech companies scale generative AI-driven search, but that will likely take a couple of years, an INMA analysis finds.

At the 2023 INMA World Congress of News Media in New York, news executives were both thrilled and anxious about the impact of generative AI on consumers and their business.

News Corp’s CEO Robert Thomson warned against the threats. AI companies scrape journalism from the Web for training the AI without consent, nor remuneration. And they summarise original articles, reducing the need to visit news Web sites and disrupting the business model.

How big is the risk, exactly?

The new search experience: In response to the rapid adoption of ChatGPT, which garnered 100 million users within two months of its launch in November 2022, both Google and Microsoft released their own chatbots and started integrating generative AI into search engines. 

Bing lets users choose whether to view a traditional list of links or chat with a bot. In its demo, Google displayed AI-generated direct answers above the links. AI answers may link to the original sources, but the companies haven’t shared any stats on click-throughs.

At an INMA study tour in New York, Microsoft’s Nikhil Kolar showed a chart confirming the intuition that only a fraction of Bing users chose chatbot over traditional search. The chart had no scale.

Kolar said that since the launch of a chatbot, the total volume of clicks on links has increased. He did not say though what proportion of the chat users click for more information vs. the search users.

Quantifying search: What Google will do matters most, as it amassed 93% share in the search market worldwide in May, per StatCounter. Microsoft’s Bing had 3% share.

In terms of the volume of visits, 7-month-old ChatGPT has already surpassed 14-year-old Bing, with estimated 1.8 billion visits in May vs. 1.2 billion, per SimilarWeb. At the same time, Google.com enjoyed 88 billion visits — or 30 times more than ChatGPT and Bing combined.

Morgan Stanley estimated that last year Google handled 3.3 trillion search queries worldwide.

Academic studies classify search queries by user intent. In a 2023 book Understanding Search Engines, Dirk Lewandowski summarised the findings:

• Navigational queries, when the user intends to browse a specific Web site, account for 22%-42% of all queries.

• Informational queries, when the user wishes to learn something, account for 11%-39%.

• Transactional queries, when the user wants to buy a product or use a service, account for 22%.

All three categories of search queries may lead to news Web sites, but generative AI is likely to impact the informational and transactional queries. AI-generated direct answers might serve the users well enough, leading to fewer clicks on links. 

Academic studies find users scarcely look at the search results other than the first ones, and many don’t scroll — particularly not on mobile. Direct answers provided on the search result pages are found to reduce user effort, improve satisfaction, and drive engagement with the search sites, but result in less clicks to sites.

The roll-out of AI-generated answers by Bing and Google is likely to be slowed down by the computing cost, although both companies face pressure to take on the challenge despite the expense. Alphabet’s chairman John Hennessy told Reuters that handling an AI-powered search query is costing 10 times more than a standard keyword search. He said though it posed: “a couple year problem at worst.”

So, publishers have a runway to respond to this disruption.

Sizing the business at risk: In 1Q 2023, on average, 29% of all pageviews on news sites were referred from search, per Chartbeat. It’s double the share of pageviews referred by social platforms (15%).

This reliance on search varies by region, with North European and American media sites depending less on search (16% and 20%, respectively), and Asian and African sites hinging on search (38% and 34%, respectively).

This leaves Asian, African, South European (33%), and Latin American (29%) news sites more exposed to any disruption of search referrals. Publishers in those regions relied more on digital advertising than reader revenue, per WAN-IFRA’s World Press Trends 2022-2023.

Generative AI-driven search might put digital reader revenue at risk too. Per Piano, in December 2022, a median brand saw 50% of paywall stops on sessions referred from search and 38% conversions to subscriptions. 

Search is the second biggest source of paid stops and conversions after direct sessions and more important to publishers than traffic from social (14% paywall stops, but only 5% conversions).

Excited about AI in the news? Worried? Get the facts from the latest INMA report by INMA Smart Data Initiative Lead Ariane Bernard, News Media at the Dawn of Generative AI.

Greg’s Readers First newsletter is a public face of a revenue and media subscriptions initiative by INMA, outlined here. Subscribe here.

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