As consumer adoption of AI chatbots grows and search engines continue to fold AI generated answers into their results pages, a mix of studies and anecdotal reports suggest that publishers are seeing significant dips in traffic. Talk of a ‘Google zero’ future, where Google no longer delivers meaningful volumes of traffic to publishers, is starting to emerge.
Google itself has pushed back on this notion, but industry analysts are clearly concerned. Search referral drops have been a common topic on earnings calls in recent weeks, as investors try to gauge the current and future impact of AI chatbots and search engines on media companies.
It’s not just publishers facing these questions. Most of the large publicly traded ad tech businesses have been asked for their views on the future of the open web too. A significant drop in publisher traffic on the open web would hit ad tech businesses’ bottom lines too, providing them with fewer impressions to help monetise, and fewer transactions from which they can take a slice of the revenue.
Ad tech executives’ responses to these queries won’t make for particularly happy reading if you’re a publisher. While a few expressed hope that the impact of AI search on their open web businesses won’t be too severe (at least in the short term), the tone of their responses overall is best summed up as “we’re already well diversified outside of the open web anyway, and will be fine if that business dwindles”. Not exactly a massive vote of confidence.
Premium publishers protected?
Let’s start with the more positive comments.
Michael Barrett, CEO of Magnite, said that so far, he hasn’t seen budgets shift away from open web publishers. “We haven’t seen buyers shy away from the open web,” he said. “And so I think we feel pretty good about where we stand today.”
Barrett said that while there’s “no question” that search referral traffic has fallen for Magnite’s clients, the types of premium publishers which Magnite works with are less vulnerable to fluctuations in search.
“If you know the types of publishers we have, quite a lot of top brands globally, known brands, media companies where they truly are destination sites and aren’t as reliant upon search referrals,” he said. “And so there’s a bit of protection there for them in terms of their future prospects for the business.”
Rajeev Goel, CEO of PubMatic, shared a similar perspective. “Given we work in the head of the market, [with] top publishers rather than the long tail, I would expect [the share of their traffic coming from search] to be lower, because most consumers are using direct navigation to get to those websites,” he said.
All fairly positive so far. But both CEOs were also keen to stress that their revenues aren’t too reliant on the open web anyway.
“We believe the exposure to our business is limited, as in a single digit percentage of revenue if there was zero search traffic going to our publishers, and we took no steps to mitigate it,” said PubMatic’s Goel. Roughly 60 percent of the impressions which PubMatic processes come from CTV and mobile, two sources which aren’t impacted by AI search, according to Goel. “Of the remaining business, which is browser based, where, of course, search is relevant, industry data indicates that search referral traffic is roughly 15 percent,” Goel added. Account for the likelihood that PubMatic’s publishers are less reliant on search, and the maths shows a single-digit impact on PubMatic.
Magnite’s Barrett similarly highlighted his company’s diversification outside of open web publishers. “It’s important to note […] our business is pretty well diversified,” he said. “We have a lot of mobile app business. Obviously CTV isn’t impacted by this directly.”
Barrett added that even if publisher traffic does fall, it won’t necessarily hurt Magnite’s bottom line. “We do work with a broad swath of top publishers [that] produce an awful lot of ad inventory,” he said. “We’ll process 1.5 trillion-plus ad requests today. I’d love to say we sell every one of those requests, but obviously we don’t. And therefore, even if there was some deterioration in terms of traffic which led to less ads going to auction, it probably just kind of increases our win rate as a percentage of traffic that we bring. Also probably lowers our processing costs.”
Placing bets elsewhere
Indeed, pointing out diversification away from the open web was a common theme across the board for ad tech executives quizzed on the impact of AI search and chatbots.
Ofer Druker, CEO of Nexxen, didn’t comment on the prospects of publishers directly. But his comments hint at a belief that future growth for the company is unlikely to be found on the open web.
“I think there are basically two paths that are less influenced or not influenced right now, which is CTV and mobile in-app,” he said. “And we, of course, have been putting a lot of emphasis on CTV for a long time and this is an element that we believe will keep growing […] And we started to shift gears into [mobile in-app] a few months ago and we are now enhancing it in a big manner, because we believe that this is an area that will keep growing, and will get the support of the market and advertisers.”
Mark Zagorski, CEO of DoubleVerify, actually sounded pretty bullish on the prospects of publishers at first. “I think the reports of the death of the open web have been greatly exaggerated […] when we looked at our programmatic growth in the first half of the year, much of that programmatic comes from the open web,” he said. “So there is still traffic and traction to be had there, even as it evolves over time, and AI and generative AI tools start to eat away at engagement.”
But that positivity seems centred on the short-term. Looking further ahead, DoubleVerify’s focus on areas outside of the open web are based in part on the idea that audiences are going to interact with open web publishers less and less.
“As we’ve noted even coming into this year, that transition of consumer engagement from open web into proprietary platforms does form the basis of our long-term thesis for our business,” said Zagorski, “which is doubling down on social, doubling down on CTV, and doubling down on areas like retail media where, although much of it is open web, it’s created its own kind of quasi-walled garden by pulling together premium publishers and data together in one place.”
Talk Jacobson, CEO and director of Perion, was perhaps the most blunt in his assessment. “I’m a big believer that web search and websites are not a segment that’s going to continue to grow,” he said.
Again, the solution according to Jacobson is to focus Perion’s efforts elsewhere. “People are going to use less web search and less websites, but marketers are going to continue to look for audiences and deploy budgets,” he said. “And we’re channel agnostic, right? So if people are going to move towards TikTok, we’re going to deploy that. If they’re going to move to Meta or YouTube, we’re going to be there […] In the next few years, we will probably see search and web starting to decline, but we’ll see other channels starting to grow. As long as we’re sitting with the advertiser itself and deploying their media investment towards outcomes, I think we’re on the right path.”
If you can’t beat them…
A lot of focus, then, on CTV, mobile, and social. But there’s another potential source of revenue if AI tools end up starving publishers of traffic: the AI tools themselves.
“There’s also an offensive opportunity, which is that the growing cadre of AI search companies will likely need ad supported business models to support the growth in their cost base and user growth,” said PubMatic’s Rajeev Goel. “And I’m not just talking about the large guys like OpenAI or Perplexity […] I think there’s a wide canvas of probably thousands of companies in the not very distant future that will likely need ad supported AI search or chat ad monetisation, that creates a significant opportunity for us.”
Magnite’s Michael Barrett agreed. “It’s pure conjecture, but I don’t think every one of these popular chat agents are going to be able to stand up an ad business the size of Google’s, [with] every one of them hiring 5,000 to 7,000 salespeople, the technology involved in it,” he said. “They’ll obviously have to have an ad play. And I fully anticipate that we’ll be able to play in that game, [with] them as publishers and us as sources of demand. So it could be new found publishers for us.”
Criteo also sees an opportunity in the AI products. Criteo’s business is largely focussed on retail media, and Criteo’s chief product officer Todd Parsons says that for the time being, AI tools are being used for discovery but not for conversion. Nonetheless, the company is actively preparing for a future where it has a hand in monetising AI chat bots.
“We’re setting up our backend, meaning our product recommendation capabilities, our audience capabilities, and our full-funnel capabilities to be called by agents through MCP [Model Context Protocol] in order for us to be able to monetise in whatever the winning hand ends up being,” he said.
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