Bubble schmubble - there are real trillions in play
Maybe AI is a bubble. Maybe it isn’t.
For ads, marketing and commerce, it doesn’t matter.
Our entire industry is about change either way. Completely and permanently. AI doesn’t have to become any smarter for it to happen either so whether or not we get to AGI is also irrelevant.
It will be worth a fortune. Real money, not bubble stock monopoly money.
The user shifts and all follows
What matters is that the users are shifting where and how they engage with the Internet.And in ads, marketing and e-commerce, money follows people like sunshine follows rain. And the people are going to chatbots and agents. And that is just how it is.
The user shift is happening fast and in huge numbers with today’s AI technology.OpenAI increased their user base by approximately ten times in about a year. Google is racing to catch up and is putting user facing Gemini (AI Mode, AIO and various separate apps) everywhere. All other large user facing apps and everyone else too will offer chatbot or agentic access over the next couple of years.All major browsers and lots of new ones are agentic. The chatbots and agents are becoming capable of purchasing right in the interfaces.
The old main model of how things were found, chosen and bought online is just that. It is old. It is being replaced. No, it will not happen over night. Same as there are still people using Yellow Pages, blue link search and humans manually going through search results on listing and shopping sites will be with us for a long time. But it will happen. It will take over.Because it is a better user experience and because there are a thousand king’s ransoms on the line for the industry.
Astonishing market size
The financial incentives to lean into this space are pretty spectacular.Online ads themselves are worth more than $800 billion a year. Real money, spent every year.And that is just for the ads themselves. All the people, all the technology (15000 companies in the Martech guide this year) and all the rest is additional - and ready to be automated and swallowed by models and AI-based tools.
And that is before we get to the big opportunity, which ise-commerce. The models are all now adding checkouts.They will all be helping humans buy things - in both B2C and B2B. And by helping I mean they will massively influence and often decide. So what is that worth?
Shopify estimates that, in 2030, B2C and B2B e-commerce will be worth >$19T and >$47T respectively. About $66T.When Amazon, Instagram,Booking.com or Tiktok (to name a few) find a customer and facilitate a purchase the fee they charge the vendor/advertiser for that usually starts at 8% and it is often much higher. Fulfilment, delivery etc is extra.
To put it in VC-speak. The TAM for this space is in the trillions.
The biggest industry opportunity ever. By far.
If we assume just 10% fees on average, there is potentially up to $6600 billion a year up for grabs in. If a company was to get a 4% share, they would have more topline revenue than Google Search has right now (with 90% of the search ads market).
This is a disruption that dwarfs anything in ads, marketing and commerce since the internet itself came about. The disruption will be gigantic but so is the opportunity. Think about all those 15000 martech company logos. Think about all the millions of people working in the industry. All the investment, the R&D, the market caps and all everything. This is bigger.
There will be tens of thousands of products and companies fighting it out for a piece of this pie.
The biggest opportunity for people ever. By far.
I am old enough to have heard print and TV-people scoff at the internet, at social, at streaming and at programmatic media. Bubble, hype, small and irrelevant. That will happen here too. It is already happening. Good luck with that. Enjoy years of losing rear guard actions, retreats and shrinking relevance.
For anyone who wants to be a part of what grows, changes and moves forward, now is the time to start something, to join a startup or that weird new sidebusiness the big corp is launching. The skills shortage is epic, the demand endless. In our industry, there has never been a more golden opportunity to get in early.
