🔍 Read the full analysis: Google Expands AI Search Ads As Search Growth Faces A Slowdown on ThorstenMeyerAI.com
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TL;DR
Google said on October 28 that ads in its AI Mode search experience are expanding to 10 more countries, with ads also coming to US follow-up questions. The announcement came as Alphabet reported Google Search & other revenue growth slowed to 12% in the third quarter; Google said lower monetization of AI Mode searches was one factor.
Google is expanding ads inside AI-generated search answers, bringing ads in AI Mode to 10 additional countries and adding them to follow-up questions in the United States. The October 28 announcement arrived as Alphabet reported 12% year-over-year growth in Google Search & other revenue for the July-to-September quarter, down from 17% the previous quarter; the company said lower monetization of AI Mode searches was one factor in the slowdown.
The 10 new markets for ads in AI Mode are 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 US, ads can now appear in answers to follow-up questions, extending advertising beyond the initial question in a chat-style search.
The changes affect two Google products. AI Overviews are summaries shown within standard search results, while AI Mode is a conversational search experience that supports longer questions and follow-ups. Google says ads in these AI experiences will be marked “Sponsored.” Its October announcement, by search ads chief Shashi Thakur, says the US follow-up format is intended to show ads in later turns of an AI Mode conversation.
Advertisers using existing Search, Shopping and Performance Max campaigns are included automatically, according to Google Ads Help. The source material says advertisers cannot opt out or separately target these placements, and reporting is provided in aggregate. Google’s AI may also generate short explanations alongside ads; advertisers cannot edit those explainers, according to the help information cited in the report.
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.
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AI Answers Become More Commercial
The expansion puts sponsored listings closer to the point where users receive an answer, rather than limiting ads to a conventional results page. For Google, that may create more opportunities to earn from searches that take place within conversational AI. The timing matters because the company has said AI Mode searches are growing quickly but are less monetizable than other search activity.
Alphabet reported $63.4 billion in Search & other revenue for the third quarter, roughly half of its total revenue. The figure was up 12% from a year earlier, compared with 17% growth in the second quarter. The quarterly revenue total was nearly unchanged from the previous quarter, although quarter-to-quarter figures can reflect seasonal and other factors and are not a direct measure of the year-over-year growth rate.
The change also matters to advertisers and publishers for different reasons. Advertisers gain potential exposure in more conversational searches, but have limited control over these placements and cannot directly edit AI-generated ad explanations. Publishers, meanwhile, may receive fewer visits if AI answers satisfy searches without a click. A 2026 working paper by Agarwal and Sen, based on a randomized experiment with 1,065 US users, reported that AI Overviews reduced website clicks by 39.8% when shown. In that experiment, ad clicks showed no measurable change. Those findings concern the study’s test conditions and do not establish what will happen across all searches or markets.
For users, the practical issue is how to distinguish paid placements from the answer itself. Google says ads in AI answers carry a “Sponsored” label and that ads do not shape the AI’s answer. The latter is the company’s assertion; the supplied material identifies no independent audit of that claim.
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Search Ads Move Into AI
Google has been adding advertising to AI search features over time. Ads in AI Overviews began appearing for mobile users in the US in October 2024, according to Google’s own posts. In May 2025, the company extended them to desktop and began testing ads in AI Mode. At Google Marketing Live in May 2026, it introduced tests of additional formats, including conversational ad text and ads within AI recommendation lists.
The October expansion follows that sequence: more countries, plus ads in later US conversation turns. Google says AI Mode queries are, on average, three times longer than standard searches. It also says click-through rates for sponsored and unpaid product-list items in AI Mode were similar. The cited comparison comes from Google’s internal US data for August 20 to September 3, 2026, and compares product listings within AI Mode; it does not measure clicks from AI answers to external websites.
Alphabet executives also described other pressures on Search revenue. Chief business officer Philipp Schindler said exchange rates were the “single largest driver” of the slowdown. He also cited changes affecting some retail advertisers in Asia and normalized spending in media and entertainment after a strong World Cup quarter. He separately pointed to lower monetization of fast-growing AI Mode queries.
“The strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI mode.”
— Philipp Schindler, Alphabet chief business officer, on the earnings call
Control, Labels and Click Effects
Several effects of the rollout are not yet established. The supplied material does not provide a separate revenue estimate for ads in AI Mode, nor does it show how much of the third-quarter slowdown came from lower AI Mode monetization versus exchange rates and the other factors Schindler described.
Google says ads do not influence the AI-generated answer, but no independent audit is identified in the source material. It is also unclear how often users will see ads in AI answers, how performance will vary among the new markets, and whether the ads will change overall click patterns. The cited study on AI Overviews tested website and ad clicks in a particular US experiment; it is not a direct assessment of the new AI Mode placements.
As of October 29, Google’s help page lists 12 countries for ads inside AI answers, with English-language availability. Germany and other EU markets are not listed in the supplied material. Google has named Brazil, Mexico and the UK as planned fourth-quarter markets, but the material does not give exact launch dates.
Rollout and Revenue Watch
Google’s stated next step is to bring AI Mode ads to Brazil, Mexico and the United Kingdom in the fourth quarter of 2026. The company has not supplied exact dates in the material provided. Advertisers already using the eligible campaign types are included automatically, so they will need to review aggregate reporting to understand how these placements perform.
The next useful evidence will come from Google’s subsequent rollout updates and financial results: whether the planned countries launch on schedule, whether Google adds markets or changes advertiser controls, and whether the company reports any clearer figures on monetization in AI Mode. For publishers and users, independent research on referral traffic, ad visibility and the distinction between sponsored content and AI answers will help show how the expansion is working beyond Google’s own claims.
Key Questions
Where is Google expanding ads in AI Mode?
Google named 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 new for users in the United States?
Ads can now appear in AI Mode answers to follow-up questions, not only around the initial question in a conversation. Google says these ads will be labeled “Sponsored.”
Can advertisers opt out of these AI search ads?
According to the Google Ads Help information cited in the source, existing Search, Shopping and Performance Max campaigns participate automatically. Advertisers cannot opt out or separately target the placements, and performance is reported in aggregate.
Why is the expansion happening as Search growth slows?
Alphabet reported 12% year-over-year growth in Search & other revenue for the third quarter, down from 17% in the second. Schindler cited exchange rates as the largest driver and said fast-growing AI Mode searches were less monetizable.
Are ads influencing Google’s AI answers?
Google says ads do not influence the AI’s answer and says ads are labeled “Sponsored.” The source material does not identify an independent audit of the claim about influence.
Source: ThorstenMeyerAI.com
