To the extent that generative artificial intelligence could enable the creation of rivals to search, and improve search, it also creates monetization opportunities for advertising. To that extent, gen AI is another form of “creating digital real estate.”
The “real estate” metaphor long has been applied in the “virtual” spaces created by operating systems (homescreens and notifications), applications (content apps, search, social media, e-commerce venues), lockscreens and browsers (home screens and tabs), with monetization platforms thereby created for advertising or other forms of sponsorship.
All create value based on user attention and interaction, much as traditional pre-internet linear media and content also created attention, and thereby audiences and ad potential.
Digital Real Estate | Monetization Platforms | Examples |
Lockscreen | Targeted advertising & content, app discovery, In-screen commerce | Glance, Apple Lockscreen widgets |
Browser Homepage & New Tab | Search engine results, sponsored content, tiles, bookmark monetization | Google Search homepage, Yahoo New Tab |
Operating System (OS) Home Screen & Notifications | Pre-installed apps and bloatware, paid app placements, Sponsored notifications | Android app placements, iOS Spotlight suggestions |
App | In-app advertising (banners, interstitials, video ads), Freemium model with in-app purchases, Subscriptions | Most mobile games, Social media apps |
In-Game Environments: The virtual world players navigate within the game. | In-Game Advertising: placing billboards, product placements, or branded content within the game environment. Virtual goods sales: selling cosmetic items, outfits, or customizations for characters or in-game objects. Limited-time events: creating temporary events or challenges that players can access for a fee. | Forza Horizon (Virtual billboards), Product placement in sports games like FIFA or Madden |
Menus and Interfaces: Screens and interfaces players interact with to manage their game experience. | Targeted in-app advertising: displaying ads based on player data and preferences within menus or loading screens. Premium Currencies: Selling a secondary currency used for specific purchases within the game (separate from in-game currency earned through gameplay). Battle passes: offering tiered reward systems where players progress through challenges to unlock exclusive items or features. | Fortnite (Cosmetic microtransactions), Apex Legends (Battle Pass), Diablo 3 (Expanded inventory slots) |
Gameplay Mechanics: The core rules and systems that govern how players interact with the game. | Subscription models: providing access to additional content, features, or servers through a monthly subscription. Expansion Packs: selling downloadable content that adds new levels, storylines, or features to the base game. Loot boxes: offering randomized virtual items through purchasable containers, potentially including rare or desirable items. | World of Warcraft (Subscription services), Call of Duty: Mobile (Double XP Boosters) |
Some idea of the value of such digital real estate can be seen in changes in ad placement in pre- and post-internet advertising.
Put simply, digital now claims up to 82 percent of all U.S. ad placements and revenue. Print has declined from 42 percent to less than three percent. Linear video dropped from 38 percent to 16 percent. Radio dipped from 10 percent to half a percent.
Channel | 1996 (Billions) | 1996 (%) | 2023 (Billions) | 2023 (%) |
Print (Newspapers, Magazines) | 80.0 | 42.1% | 10.0 | 2.7% |
Linear Video (TV Broadcast, Cable) | 72.0 | 37.9% | 60.0 | 16.2% |
Network Radio | 10.0 | 5.3% | 2.0 | 0.5% |
Other (Radio Spots, Out-of-Home) | 28.0 | 14.7% | 18.0 | 4.9% |
Digital Ads (Search, Social Media, Display) | - | - | 300.0 | 81.7% |
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