AI search emerges as the consumer gateway, redefining digital advertising power

The global digital advertising ecosystem is entering its most dramatic transition in years, one where artificial intelligence, not search engines, defines the consumer journey.

By 2026, advertisers are projected to cut their open web display ad spends by 30% according to Forrester, and redirect that money to CTV, retail media, and paid social which are platforms that still ensure measurable visibility and guaranteed reach.

What sounds like another shift in marketing strategy is, in reality, a fundamental rewiring of how discovery, decision-making, and advertising work in an AI-led world.

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Until recently, a consumer looking for a new course, gadget, or skincare product might browse multiple websites, watch a few videos, compare reviews, and then decide. That entire journey and the advertising that funded it happened across the open web.

Today, AI search has collapsed that process into a single, automated decision flow.

AI Search and the One-Click Decision Era

Explaining the deeper behavioral shift, Shradha Agarwal, Co-Founder & CEO at Grapes, says AI has turned fragmented browsing into a single decision moment, “Earlier, we were reading 10 articles, watching different videos, and comparing reviews from multiple sites. Now, when I do an AI search, I get a structured answer in one place, could be in a table or logical summary telling me what to choose, why, and how. It’s become a single automated flow rather than a long journey.”

She adds that AI search now delivers clean product data, transparent pricing, strong reviews, and consistent metadata, enabling instant choices. But this efficiency has also collapsed the consumer’s path to discovery, making it harder for brands to appear naturally in that journey.

“Everyone has access to Meta, OTT, or Google AdWords,” Agarwal notes. “But today, it’s creativity that drives results. With third-party signals disappearing, storytelling is making a comeback with micro-stories that grab attention and build emotion are becoming essential. This is why brands, founders, even employees are creating content themselves. The algorithm rewards relevance, and creativity has become the differentiator.”

She points out that platforms are simplifying targeting because they now rely on content behavior, not demographics. “Meta, for example, has reduced targeting filters because its AI already knows what type of content resonates with which users. The only viable solution now is first-party data and powerful creativity.”

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Zero-Click Journeys and the Fall of the Open Web

With AI-driven, zero-click searches, discovery now happens without ever leaving the search interface. Features like Google’s AI Overviews (2024) and AI Mode (2025) provide structured, summarized answers directly within search results.

This means users no longer need to click through to publisher sites, and the ripple effect has been devastating. By late 2024, estimates suggested that up to 60% of Google searches ended without a click, starving publishers of traffic and ad impressions.

As a result, what was once an open, decentralized ecosystem of websites and ad networks is now morphing into a handful of closed, AI-powered ecosystems, each owning the audience, the data, and the monetization levers.

“Consumers are increasingly relying on AI for consumption-related decision-making,” says Dr. Angeline Gautami Fernando, Program Director, Great Lakes Institute of Management. “The 30% cut is an acknowledgment of the fact that most consumers are moving toward zero-click journeys. AI’s impact on the consumer journey will play a key role in shaping how marketers reach out to consumers.”

This evolution doesn’t just affect brands or ad-tech players. This impacts industries like education, e-commerce, and lifestyle, where digital discovery drives a majority of sales. Educational institutes, for instance, have long relied on organic search and display advertising to attract students. As AI search reshapes discovery, even higher education marketers are rethinking outreach strategies, integrating storytelling-led campaigns and CTV advertising to remain visible.

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New Value Chain Emerges in Digital Advertising

The digital advertising value chain, once filled with intermediaries like DSPs, SSPs, and measurement partners, is being radically simplified. Brands now prefer platforms that combine visibility, audience data, and verified performance in one place.

“This is a huge redrawing of the power map,” says Merin Mariya, Director, Office of Press & Media at Alliance University. “The money that used to flow to thousands of niche publishers and ad-tech companies is drying up. Instead, budgets are being funneled into the hands of the big landlords like Amazon, Walmart, Disney/Netflix, and Meta.”

These giants have what the open web lacks which is the first-party behavioral data and closed-loop attribution. They know exactly who watched, clicked, and purchased. Smaller publishers that once thrived on programmatic inventory are now being squeezed out unless they can offer unique data or niche value.

The Great Trade-Off: Performance vs. Discovery

For marketers, this new world presents a paradox. The focus on measurable ROI and performance marketing has never been higher, but it risks eroding brand discovery and emotional storytelling.

“Marketers are responding to AI-driven consumer behaviour,” says Dr. Fernando. “But this will not come at the cost of traditional channels. Mass media will continue to play its role in awareness, while CTV and AI discovery interfaces bring the advantage of measurable performance.”

Abhishek Chakraborty, Head of Brand Communication, Digital & PR at Oriflame, echoes the need for balance: “While ROI is important, over-prioritizing short-term metrics can hurt long-term loyalty. A balanced marketing mix combining performance optimization with storytelling is crucial for building sustainable brand equity.”

Mariya draws a stark analogy, “It’s like planting crops you can harvest this season while neglecting the soil that feeds you next year. Retail media gives you instant ROI, but the open web enables serendipitous discovery. By abandoning it, brands risk becoming invisible until the moment of purchase.”

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CTV and Retail Media: Rebuilding the Funnel

With open web ad performance falling, Connected TV (CTV) and retail media are emerging as the twin engines of the new marketing funnel.

CTV acts as the top-of-funnel, combining the storytelling power of television with the precision of data-driven targeting. “CTV allows brands to build emotional connections with measurable impact,” says Dr. Fernando.

Retail media, on the other hand, is the bottom-of-funnel powerhouse, leveraging purchase data to connect exposure directly to conversion. “It’s the ultimate ‘last-mile’ advertising solution,” says Mariya. “Platforms like Amazon and Walmart can prove that an ad led to a sale.”

Chakraborty observes that when CTV and retail media are paired with AI analytics, they “create a high-quality engagement loop that enhances both brand awareness and purchase intent.”

The Dawn of the Post-Web Advertising Era

All three experts agree: the post-web era has begun.

“With AI-driven discovery becoming dominant, we’re transitioning to a post-web advertising era,” says Dr. Fernando. “As first-party data becomes a key differentiator, platforms are redefining the rules around ownership, access, and pricing.”

Chakraborty adds that this shift comes with its own risks, “AI-curated ecosystems offer efficiency, but they raise concerns around transparency, privacy, and inclusivity. The challenge will be ensuring innovation without losing trust.”

And as Mariya notes, “Advertising is no longer about where an ad is placed, it’s about who controls the experience. The web isn’t dying, but the business model that sustained it certainly is.”

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What Lies Ahead

The data paints a clear picture. According to WARC, retail media investments will reach $174.9 billion this year, up 13.7% year-on-year. Meanwhile, IAB forecasts that digital display’s share of global ad spend will drop to 12.8%, confirming the open web’s fading influence.

Dr. Fernando compares this to “the early days of the web, full of experimentation and realignment before new norms emerge.” The winners in this phase, she says, will be those who combine machine precision with human creativity, balancing algorithmic performance with emotional depth.

Beyond the Click: Reimagining Attention in a Post-Web Economy

The open web may not vanish completely, but its foundation is undeniably eroding. The center of gravity has shifted from open discovery to AI-guided intent, from publishers to platforms, and from clicks to context.

Advertising is increasingly evaluated not only by impressions, but by presence, relevance, and meaningful engagement within closed ecosystems. Capabilities in creative storytelling, effective use of first-party data, and AI-driven precision will play an important role in shaping future marketing outcomes. In the AI era, the traditional click may become less central, but the focus on earning and sustaining consumer attention continues to