🔍 Read the full analysis: Google Expands Ads In AI Search As Growth Cools on ThorstenMeyerAI.com
Get business pricing on monitors, keyboards and dev gear
- Business-only prices and quantity discounts
- Tax-exempt purchasing
- Multiple users, one account, clear invoices
TL;DR
Google is expanding ads inside AI Mode to 10 more countries and adding them to US follow-up questions. The move comes as Search & other revenue growth slowed to 12% in the third quarter; Google cited currency effects and lower monetization of AI Mode searches. The company says ads will be labeled “Sponsored,” while independent evidence about their effects on website traffic remains limited.
Google is expanding ads inside its AI Mode search experience to 10 more countries and adding them to US follow-up questions, widening the places where sponsored results can appear within an AI-generated conversation. The announcement came as Alphabet reported that Search & other revenue grew 12% year over year in the third quarter, down from 17% the previous quarter. Google says the ads will be labeled “Sponsored”; how these placements affect website traffic and users’ ability to distinguish advertising from answers remains an open question.
In an October 28 announcement, Shashi Thakur, who leads Google’s search ads business, said ads in AI Mode are rolling out in Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines and Singapore. Google said Brazil, Mexico and the United Kingdom are planned for the fourth quarter of 2026. In the United States, ads are also being added to follow-up questions in AI Mode, so advertising can appear beyond a user’s initial query. Google’s help page lists 12 countries for ads inside AI answers, with the feature available in English, according to the source material.
Google describes AI Mode as a chat-style search experience, separate from AI Overviews, which are summaries displayed within ordinary search results. The company has already introduced ads in AI Overviews for US mobile users and later expanded them to desktop. It began testing ads in AI Mode in 2025, according to the company’s product history. The latest move extends the conversational format: an exchange about a problem, such as a green swimming pool, could include advice and an ad for a related product within the same answer.
Existing Search, Shopping and Performance Max campaigns participate automatically, according to Google Ads Help. Advertisers do not have a separate targeting control or an opt-out for these AI placements, and reporting is provided in aggregate. Google may generate short explanatory text beside ads, which advertisers cannot edit. The company says ads in AI answers carry the “Sponsored” label and do not influence the AI’s own answer. The latter is Google’s statement, not an independently verified finding in the material provided.
Infographic 01 · From test to global
The answer now carries the ad, in more places.
How Google moved ads into its AI answers in two years, where they show today, and the revenue pressure behind the move.
Where ads appear inside AI answers
Per Google’s help page and the 28 Oct post. The list “may not be exhaustive”.
Follow-up questions (“multiturn ads”): US only. Germany and the rest of the EU: not listed. Ads above or below AI Overviews can show wherever AI Overviews exist (200+ countries and territories).
Why now: Google Search & other revenue growth
Year over year, as reported by Alphabet. Bars scaled to 19%.
Q2 to Q3 2026: about +0.1%. Same months a year earlier: about +4.4% (my arithmetic). Google names exchange rates as the largest driver of the slowdown, and the “lower monetization” of AI Mode as one factor.
- 3 Oct 2024Ads inside AI Overviews go liveUS, mobile, after months of testing
- 21 May 2025Desktop in the US; first tests in AI ModeEnglish-speaking countries announced for later in 2025
- 20 May 2026New formats in testingConversational Discovery ads and Highlighted Answers, both with a Gemini-written “AI explainer”
- 28 Oct 2026AI Mode ads in 10 more countriesPlus “multiturn ads” in follow-up questions in the US; labeled “Sponsored”
- Q4 2026Planned: Brazil, Mexico, United Kingdom“Additional locales, including” these three
Sources: Google, 28 Oct 2026; Google Ads Help, accessed 29 Oct 2026; Google, 3 Oct 2024; Google, 21 May 2025; Google, 20 May 2026; Alphabet Q3 2026 release and the Q4 2025, Q1 2026 and Q2 2026 releases. “3× longer” is Google’s AI Mode report (US, May 2026). Quarter-on-quarter changes and bar scaling: Thorsten Meyer.
Powered by Thorsten Meyer AI
Ads Follow the Search Conversation
The expansion matters because it puts advertising into a format where users may ask several connected questions rather than make one short search and scan a list of links. That gives Google more opportunities to show ads during a session, while also changing how advertisers reach people who are researching a product or trying to solve a problem. But participation rules are limited: campaigns are included automatically, and advertisers cannot separately target or exclude these AI placements, according to Google’s help documentation.
It also arrives as Google’s core search business continues to grow but at a slower rate. Alphabet reported $63.4 billion in Search & other revenue for July through September, about half of the company’s total revenue. On the earnings call, Google business chief Philipp Schindler said currency movements were the single largest factor behind the growth slowdown. He also pointed to lower monetization of AI Mode searches. That makes the ad rollout commercially relevant, although the announcement does not establish how much revenue the new formats will generate.
For publishers, the central concern is that an AI answer may satisfy a search without sending a reader to an outside site, even if ads remain visible in the answer. A 2026 working paper by Agarwal and Sen reports that, in a randomized experiment with 1,065 US users, AI Overviews reduced clicks to websites by 39.8% when they appeared, while clicks on ads showed no measurable change. That finding is limited to the study’s design and should not be treated as a result about every search or about the newly expanded AI Mode ads. It does, however, illustrate why the balance between ad visibility and publisher referrals is being watched.
Popular right now
Ninja CREAMi 7-in-1 Ice Cream Maker, NC301
Dyson Car+Boat Cordless Handheld Vacuum
Ninja Specialty Coffee Maker CM401, 10-Cup Carafe, Fold-Away Frother, Black
As an affiliate, we earn on qualifying purchases.
A Slower-Growing Search Business
Alphabet’s reported Search & other revenue grew 17% year over year in the fourth quarter of 2025, 19% in the first quarter of 2026 and 17% in the second quarter, before slowing to 12% in the third quarter. Revenue was $63.3 billion in the second quarter and $63.4 billion in the third. The company attributed the slowdown chiefly to foreign-exchange movements, while also citing effects in some retail, media and entertainment advertising and lower monetization of AI Mode queries.
Schindler said on the earnings call that “the strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI mode.” The comment links AI search growth to the business challenge Google is trying to address, but it does not quantify the revenue difference between AI Mode and conventional search. Google also said AI Mode queries are, on average, three times longer than classic searches. That is a company-provided comparison, not an independent measure of ad performance.
Google has promoted several ad formats for AI search. At Google Marketing Live in May 2026, it began testing “Conversational Discovery ads,” with ad text tailored to a question, and “Highlighted Answers,” in which an ad can appear within a list of AI recommendations. Google says click-through rates for sponsored and organic product-list items in AI Mode were already similar. Its cited comparison uses internal US data from August 20 to September 3, 2026, and compares those two kinds of listings—not ads with clicks to external websites.
““The strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI mode.””
— Philipp Schindler, Google’s chief business officer, on the third-quarter earnings call
Traffic Effects Remain Unmeasured
The announcement does not provide a revenue forecast for the new ad placements or say how much they might offset lower monetization in AI Mode. Google’s reported click-through comparison concerns sponsored and unpaid product listings within AI Mode, based on a short period of internal US data; it does not show whether ads change clicks to publisher websites. The working paper on AI Overviews examines a different search feature, so its results cannot be directly applied to this rollout.
Google says ads do not affect the AI-generated answer, but the source material provides no independent audit verifying that claim. It also remains unclear how users will interpret sponsored content within conversational answers, whether the new markets will receive the same formats at the same pace, and how advertisers will assess performance when reporting is aggregated. As of October 29, the provided Google help-page information does not list Germany or other EU countries for these ads.
Rollout and Revenue Tests Ahead
Google says ads in AI Mode are expanding now to the 10 named countries, with Brazil, Mexico and the UK planned for the fourth quarter of 2026. US users are also due to see ads in follow-up questions. The next useful evidence will include whether Google reports results from these placements, how the formats are labeled and displayed in practice, and whether the company changes its advertiser controls or reporting.
Alphabet’s subsequent earnings updates should show whether Search & other growth changes as AI Mode use and monetization develop, but the current announcement gives no timetable for a measurable revenue contribution. Publishers and advertisers will also be watching for independent research that distinguishes the effects of AI Overviews from those of AI Mode. For users, the immediate indicator Google has specified is the “Sponsored” label; the broader effects on referrals and advertising performance are still developing.
Key Questions
Where is Google expanding ads in AI Mode?
Google announced a rollout in Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines and Singapore. Brazil, Mexico and the UK are planned for the fourth quarter of 2026.
What is changing for US users?
Google is adding ads to follow-up questions in AI Mode, not just the initial query. The company says ads in AI answers will be marked “Sponsored.”
Can advertisers opt out of these AI placements?
According to Google Ads Help, existing Search, Shopping and Performance Max campaigns participate automatically. Advertisers have no separate targeting or opt-out control for these placements, and results are reported in aggregate.
Why does the expansion matter to Google’s business?
Alphabet reported that Search & other revenue grew 12% year over year in the third quarter, down from 17% in the second. Google cited exchange rates and lower monetization of AI Mode searches among the factors affecting growth.
Has Google shown that AI search ads do not affect publisher traffic?
No. The cited Google comparison concerns ad and unpaid product-list clicks inside AI Mode, not visits to outside websites. A separate working paper found fewer website clicks when AI Overviews appeared in its experiment, but that study examined AI Overviews, not the new AI Mode placements.
Source: ThorstenMeyerAI.com
