Core Insights - The emergence of AI chatbots like ChatGPT is expected to significantly impact the advertising industry, potentially changing the dynamics of how consumers interact with brands and advertisements [1][2]. Advertising Model Changes - The advertising landscape is shifting from a Meta and Alphabet duopoly to a more diversified model influenced by AI chatbots, which can guide consumers through the entire purchasing funnel [2][3]. - AI chatbots may adopt a programmatic advertising model, allowing brands to bid for ad placements based on impressions, rather than relying on traditional ad sales methods [6]. Consumer Engagement Strategies - Brands are advised to implement Answer Engine Optimization (AEO), which focuses on creating content that aligns with AI chatbot recommendations, rather than traditional paid advertising [8]. - The transition from interruptive advertising to a more assistive model is emphasized, where effective ads feel like recommendations rather than promotions [9]. Consumer Expectations - Consumers are likely to appreciate a personalized experience from AI chatbots, as long as advertising does not detract from the utility of the service [11]. - The current user base of paid subscribers for AI chatbots may mitigate the risk of prioritizing advertising revenue over user experience [12].

Core Insights - Younger generations, particularly Gen Z (33%) and Millennials (26%), are increasingly preferring AI platforms for product research over traditional methods like search engines [1][3] - The report indicates a significant shift in consumer trust, with Gen Z and Millennials trusting AI platforms more than human recommendations for curated product suggestions [4][8] - The emergence of agentic commerce signifies a new era in shopping, where AI platforms are becoming integral to the consumer journey [3][6] Consumer Behavior Trends - A survey of 1,000 consumers across the U.S., U.K., and Australia/New Zealand reveals that 41% of all respondents use AI platforms daily, highlighting their growing importance in the shopping process [2][5] - Nearly half (48%) of consumers maintain a "perpetual shopping list," indicating a shift towards an "always-on" shopping mindset [6][8] - 63% of consumers abandon carts when required to create accounts, pointing to friction in the e-commerce experience [8] Trust and Loyalty Dynamics - 23% of Gen Z and 27% of Millennials trust AI product recommendations more than those from humans, showcasing a shift in how consumers perceive trust in the shopping journey [4][8] - Brands that engage with AI-driven platforms are likely to gain relevance and loyalty from younger consumers [3][6] Implications for Brands - Companies must develop strategies like Answer Engine Optimization (AEO) or Generative Engine Optimization (GEO) to leverage AI platforms effectively [5] - The integration of AI into the shopping experience necessitates that brands provide rich data to enhance consumer engagement and conversion [5][6] - The evolving landscape of consumer touchpoints, including platforms like YouTube and WhatsApp, requires brands to adapt their marketing strategies accordingly [6]