Edited on Oct 31, 2026.
Paid media in the answer-engine era involves buying visibility across AI systems that directly answer questions, moving beyond traditional bidding for clicks on a search results page. Google's AI Overviews reduced paid search click-through rates by 68 percent on queries where they appeared, according to a September 2025 study by Seer Interactive. This shift forces paid media budgets to prioritize citation share over pure click volume.
How have AI Overviews impacted paid search clicks?
AI Overviews significantly reduced paid search clicks, as demonstrated by Seer Interactive's September 2025 study. The agency analyzed 3,119 informational queries across 42 organizations, tracking 25.1 million organic impressions and 1.1 million paid impressions from June 2024 through September 2025. On queries with an AI Overview, the paid click-through rate fell by 68 percent, from 19.7 percent to 6.34 percent. Organic CTR on these same queries also dropped by 61 percent.
The decline was rapid, with Seer's data showing paid CTR collapsing from approximately 11 percent to 3 percent in July 2025 alone. Seer Interactive identified this single-month drop as one of the sharpest shifts in its 15 months of tracked data. A separate Ahrefs study, updated in December 2025 with 300,000 keywords, found AI Overviews correlated with a 58 percent lower average click-through rate for the top-ranking page, an increase from the 34.5 percent drop Ahrefs measured in April 2025.
Why are clicks declining even without AI Overviews?
Organic click-through rates decreased by 41 percent year over year, even on queries where no AI Overview appeared. Seer Interactive concluded that users are clicking less across the board, not just on AI-Overview queries. The agency suggests that ChatGPT, Perplexity, and social search are drawing query volume away from traditional search results entirely.
This trend has significant implications for paid media budgeting because it indicates a broad, structural shift. Brands cannot resolve the issue by merely avoiding AI-Overview-triggering keywords because the click decline is widespread. Search itself is fragmenting across multiple answer surfaces, and paid media strategies must now follow the query wherever it lands, not just the search engine results page.
Yes, being cited in an AI Overview significantly helps paid performance, creating a large performance gap. Seer Interactive found that brands cited within an AI Overview earned 35 percent more organic clicks and 91 percent more paid clicks than brands not cited, on the same query set. Citation, rather than just ranking, is now a critical variable determining whether a paid click occurs.
The mechanism for this impact is straightforward. An AI Overview provides an answer before a user reaches the results listed below it. A brand cited inside that answer maintains visibility even as overall click volume decreases. A brand not present in the citation has no presence in the answer itself, competing instead for a shrinking pool of clicks below the AI Overview, regardless of whether its listing is organic or paid.
What happened when Perplexity offered ads within AI answers?
Perplexity launched Sponsored Questions in the United States on November 12, 2024. Initial advertisers included Whole Foods Market, Indeed, Universal McCann, and PMG, as reported by TechCrunch. These ads appeared as AI-generated follow-up questions labeled "sponsored," with Perplexity's AI creating the answers rather than the brands themselves.
This advertising experiment did not scale. Perplexity stopped accepting new advertisers in October 2025. By February 2026, the company confirmed it was not pursuing further ad deals, instead pivoting to a subscription-first, ad-free model alongside Anthropic's Claude. Perplexity's head of publisher partnerships stated at Advertising Week NYC that ads "aren't currently on the roadmap" for the company's Comet browser.
This case is relevant for paid media planning because it demonstrates that emerging AI ad surfaces are not yet reliable budget lines. An ad format can launch with recognizable brand partners and still be retired within 15 months. Paid media teams that allocated spend to Perplexity's ad product in 2025 had to reallocate that spend without any advance warning from the platform's own roadmap.
OpenAI took the opposite path in 2026, opening a self-serve beta Ads Manager for ads inside ChatGPT. The platform is still a beta with restricted categories and no cross-advertiser benchmarks, which supports treating it as a test budget. The ChatGPT Ads Guide sets out its bidding, minimum budgets, countries and policy limits.
Three specific shifts in paid media budgeting are directly indicated by the available data. First, paid search budgets must incorporate a citation-share component, in addition to a keyword-bid line. Seer's data shows citation status influences click performance more than bid position. Second, funds allocated for speculative emerging AI ad surfaces, like Perplexity's now-retired product, should be treated as reversible investments, not durable channels, given the rapid withdrawal of that format.
Third, measurement practices must now track visibility and citation alongside traditional clicks. Seer Interactive's September 2025 report explicitly recommended that success metrics are shifting from clicks and traffic to visibility and share of voice. This evolution reflects the convergence of PPC, advertising, and PR. Separate budgets and KPIs no longer align with how a buyer conducts a 20-minute research session that spans paid search, an AI Overview, and a direct AI-engine query.
An integrated budget begins with a citation-share audit. This audit identifies which brand-relevant queries trigger an AI Overview and whether the brand is cited within the answer. This assessment is crucial for determining if a keyword is even worth a paid bid, as Seer's data indicates that paid CTR on AI-Overview queries without a citation is near the lowest measured range.
The budget then splits into three distinct pools, rather than remaining a single allocation. A demand-capture pool continues to bid on high-intent, transactional queries where AI Overviews appear less frequently. A citation-investment pool funds the structured content, schema, and Generative Engine Optimization work necessary to earn citations on queries where an AI Overview does appear. A monitoring pool tracks citation share monthly, following the same cadence Seer Interactive uses in its recurring study, instead of conducting audits only once a year.
What replaces CPC optimization in the answer-engine budget?
Five capabilities now earn budget alongside CPC optimization, and together they build the citation a paid click increasingly depends on. CPC still has a job: branded search defends the brand against competitor bidding, and retargeting converts warm audiences. The shift is in where the next dollar goes.
| Capability | What it involves | Why it earns budget |
|---|
| Citation Share measurement | Run about 25 buyer-intent prompts across the five major engines on a schedule, count brand mentions and track competitors | It is the answer-engine version of a search query report, and many brands do not have one |
| Trusted-source citation programs | Earn coverage in the sources engines repeat, such as Wikipedia, Reddit, trade publications, government data and peer-reviewed research | Earned citations move Citation Share, and paid clicks do not |
| Entity clarity | Keep name, category, founder and location consistent across Wikidata, Crunchbase, LinkedIn and the brand's structured data | Engines cannot recommend a brand they cannot resolve |
| Structured, extractable content | Declarative first sentences, clean H2 structure, FAQ schema and named entities | Engines lift answers from pages built for extraction |
| First-party data publishing | Publish original research and datasets | Primary data gets cited, and cited brands get recommended |
The strategic question for a CMO moves from "what is my average CPC?" to "what is my Citation Share by buyer-intent prompt, across five engines, month over month, against the competitive set?" Measurement comes first, and strategy follows the audit.
How should a paid media budget be planned?
A paid media budget is planned top down from total marketing spend, then split by goal and by channel role. Gartner's 2026 CMO Spend Survey of 401 marketing leaders, conducted January through March 2026, found marketing budgets at 7.8 percent of company revenue, with paid media at a five-year high of 31.4 percent of marketing expenses, up from 25.1 percent in 2021, as reported by Chief Marketer.
Applied to a hypothetical company with $50 million in revenue, those averages give about $3.9 million of marketing budget and about $1.22 million of paid media. That is an illustration of the survey averages, not a recommended allocation, and a company's own margin and growth stage should move the number.
- Set the paid media total from the marketing budget, using the Gartner averages above as a reference point and your own history as the anchor.
- Split the total by goal. Gartner reported that awareness and conversion together account for 62.6 percent of media spend, while loyalty and retention fell to under 15 percent, so check whether your own mix has tilted the same way without intent.
- Assign each channel one job, using the comparison table in the next section, and write the metric that proves the job is done.
- Reserve a fixed share for tests, such as a new platform or an AI ad surface, and set it before the quarter starts so that tests do not drain proven channels.
- Review monthly against incrementality, which means comparing results for people who saw the ads against a holdout group, and move budget from channels that only report credit for sales that would have happened anyway.
Gartner's survey also found that 53 percent of respondents planned to invest more in paid media, while 25 percent expected to cut spend, so competition for the same audiences is rising alongside the budgets.
How do paid search, paid social and programmatic compare?
Paid search captures demand that already exists, paid social creates demand and tests creative, and programmatic buys reach and frequency across many sites, apps and connected TV through automated auctions. The table is EPR's framework for assigning each channel a job, not an industry standard.
| Dimension | Paid search | Paid social | Programmatic display and video |
|---|
| Buyer intent | High, because the buyer typed the query | Low to medium, because the ad interrupts a feed | Low to medium, depending on the placement and audience |
| Typical pricing | Pay per click in an auction | Pay per thousand impressions or per click in an auction | Pay per thousand impressions, bought through a demand-side platform |
| Targeting | Keywords, location and audience lists | Platform audience, interest and lookalike data | Audience segments, page context and retargeting |
| Best job | Capture transactional demand and defend the brand name | Introduce a product, test creative, retarget visitors | Add reach and frequency, including connected TV, and retarget at scale |
| Main risk to check | AI Overviews cut paid click-through by 68 percent on the queries where they appear, per Seer Interactive | Creative fatigue and platform-reported results that overstate sales | Placement quality, brand safety and unclear fees along the supply chain |
| How to measure | Conversions, branded search lift and Citation Share on the same queries | Incrementality tests next to platform-reported return | Holdout tests and brand lift studies, not impressions alone |
The order to build them follows the buyer's situation. A brand selling a product people already search for starts with paid search. A brand introducing a new product or category starts with paid social to create the demand that search later captures. A brand that has proven both adds programmatic to extend reach, and each step still needs the Citation Share check described above, because a cited brand earned 91 percent more paid clicks than an uncited one in Seer's data.
ChatGPT Ads Guide: Self-Serve From 25 USD a Day
Generative Engine Optimization
Google AI Overviews Citation Source Index 2026
AI Platform Citation Source Index 2026
Citation Share: Definition, Formula and How to Measure It
