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Google’s AI Mode, an extension of the Search Generative Experience, is testing ads within AI-powered search results. This new feature allows users to interact in a conversational interface, posing complex queries and receiving detailed, AI-generated responses. Ads will be integrated into these conversations, sourced from Search, Shopping, and Performance Max campaigns. Marketers face challenges in adapting to this new format, with concerns over ad visibility and return on ad spend. As Google continues to evolve AI-powered search, advertisers must adjust their strategies for creative copy and targeting to succeed.
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As Google continues its rapid push into AI-powered search, the tech giant has confirmed it is testing ads in AI Mode, a conversational interface that reimagines traditional search. While this may seem like the next logical step in monetizing Google’s evolving AI search experience, advertisers are raising serious concerns about visibility, click-through rates, and return on ad spend.
In this article, we break down what AI Mode is, how Google plans to integrate ads, and what it all means for marketers, users, and publishers.
Launched in beta in March 2025, Google’s AI Mode is an extension of the Search Generative Experience (SGE). It enables users to pose complex, multi-step questions and receive detailed, AI-generated responses, with the option to delve deeper through follow-up questions. Think of it as Google Search meets ChatGPT, a natural, chat-based interface driven by Gemini 2.0.
Unlike traditional search, where users scan a list of blue links, AI Mode delivers direct answers synthesized from real-time web data, shopping platforms, and the Knowledge Graph. This powerful AI search approach keeps users within Google’s ecosystem longer, which raises an important question: how does Google monetize this?
According to Adweek and confirmed by Google, the company plans to expand ads in AI Mode, using lessons learned from its earlier experiment with ads in AI Overviews which are brief, AI-generated summaries that now appear atop some search results.
These ads in AI Mode are drawn from existing Search and Shopping campaigns, including Performance Max, and will show up within or directly beneath AI Mode responses. The goal is to ensure relevant, sponsored content is contextually woven into the chat, such as showing a website builder ad after a user asks how to start a business.
However, the exact mechanics of ad placement, auction dynamics, and creative formatting remain unclear, prompting uncertainty in the advertising community.
The reaction to Google testing ads in AI Mode has been mixed. On one hand, marketers see potential in targeting users with hyper-relevant ads within a high-intent environment. On the other hand, many fear that the immersive nature of AI-powered search will lower ad visibility and click-through rates.
“Advertisers will need to get creative to capture attention and pull users away from the conversation,” said Melissa Mackey, Head of Paid Search at Compound Growth Marketing.
Navah Hopkins, of PPC platform Optmyzr, added that ads integrated into AI Mode could carry premium pricing, raising costs per click and potentially lowering return on ad spend. Since AI Mode is designed to answer questions thoroughly, users may not feel compelled to click, even on sponsored results.
Following the announcement at Google Marketing Live in May 2025, ads began appearing for some users across mobile and desktop devices. These ads are automatically pulled from eligible Search, Shopping, and Performance Max campaigns with no opt-in required.
For example, if a user asks about launching a clothing brand, the AI might suggest building a website and then immediately serve an ad for a website builder, all within the same response. Google is experimenting with placements to make these ads feel more like helpful next steps rather than disruptive promotions.
Still, frequency is low. Many industry analysts report they haven’t yet seen these ads in action, suggesting Google is conducting a gradual rollout with highly targeted testing.
With AI-powered search set to reshape how users interact with information, marketers must rethink their strategy:
Creative copy is key: Ads need to blend into the conversation without feeling intrusive.
Broader targeting may help: Using broad match and rich assets (images, reviews, product details) can increase eligibility for AI placements.
Be ready for AI Max: A new campaign type in development, “AI Max for Search,” may offer deeper integration into AI experiences.
However, a lack of transparency remains a problem. Google has yet to release detailed performance metrics for these AI-based ads. Advertisers are left to rely on standard Search Terms reports and indirect attribution, making optimization a challenge.
For users, the reception is cautiously optimistic. If the ad feels like a helpful suggestion, it could enhance the experience. However, a CivicScience poll revealed that 36% of U.S. adults are less likely to purchase from brands that use AI in their advertising, suggesting that skepticism persists.
Publishers, meanwhile, worry about lost traffic and revenue. As AI answers occupy more SERP real estate, now with monetization, fewer clicks may be directed to external sites. Some publishers fear that Google is creating a closed loop of information and revenue, cutting them out of the equation.
Google’s move to test ads in AI Mode isn’t just a minor update. It’s a significant shift in how search works and how ads reach users. While the rollout is slow and cautious, the implications are massive. Smart marketers should:
Audit current Search and Shopping campaigns for relevance and breadth
Monitor AI Mode performance through indirect indicators
Prepare a creative that can live naturally within conversational interfaces
As the AI race in search intensifies, with Bing, Perplexity, and even ChatGPT testing monetization strategies, the future of paid search will be defined by how well advertisers can adapt. Read more about how to get founded by AI here
| Action | Description |
|---|---|
| Audit Current Campaigns | Review Search and Shopping campaigns for relevance and coverage to ensure they are aligned with evolving trends and AI-driven changes. |
| Monitor AI Mode Performance | Track performance through indirect indicators such as user engagement and ad interaction to gauge how AI Mode is impacting results. |
| Prepare Creative for Conversational Interfaces | Develop ad creatives that can seamlessly integrate into conversational AI environments, ensuring they feel natural and engaging within those contexts. |
| Adapt to AI-driven Paid Search | Prepare to evolve strategies as AI-driven search experiences and monetization strategies, like those from Bing and ChatGPT, continue to reshape the paid search landscape. |
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