Google will show ads inside its AI Search answers in markets outside the U.S., as its core search ad growth slows and investors push the stock down 8%.
Google is taking ads inside its AI-powered Search answers global. Until now, the company has focused on the U.S. The news came Wednesday during Alphabet's third-quarter earnings call. Alphabet is Google's parent company. If you use Google's AI Mode, you can expect sponsored suggestions to show up in the answers you read.
Google's chief business officer, Philipp Schindler, said the company is "taking our monetization footprint global for the first time." Ads in AI Mode are moving into international markets. In the U.S., Google is also adding what it calls multi-turn ads. AI Mode is Google's chat-style way to search, where you ask questions and get written answers instead of a list of links.
Alphabet's revenue hit $127.6 billion, up 25% from a year earlier. But the money from Search ads is growing more slowly. Search revenue rose 12% in the third quarter, after 17% in the second quarter and 19% in the first. Alphabet shares fell 8% after the report. AI ads are Google's bet on a new source of growth.
Schindler said early results look good. Click-through rates for sponsored product listings in AI Mode are comparable to those for regular, unpaid listings. A click-through rate is how often people click on something they see. Google also says its user research shows people find the ads relevant. These are Google's own claims, and no outside data was shared.
The ads build on formats Google announced in May. They include ads that respond to a user's questions and sponsored recommendations placed inside AI-generated answers.
When an AI answer recommends a product or business, look for a label showing whether it is an ad. A sponsored pick is not the same as a neutral one. If you run a business, AI answers are now a new place to advertise, in more countries than before.
The material does not say which countries get the ads first, when they will appear, or exactly how they will be labeled. It also does not say how much advertisers will pay for these placements.
Ads are coming to Google's AI answers worldwide, so check whether a recommendation is labeled as sponsored before you trust it.
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