Google Says Ads in AI Mode Monetize Less Than Traditional Search Ads
TLDR
Google's chief business officer said on the earnings call that ads in AI Mode have lower monetization than ads in traditional search.
Optimixed Overview
Optimixed's original report on this story.
During Google's earnings call, Philipp Schindler, the company's senior vice president and chief business officer, said that ads shown in AI Mode have a "lower monetization" than ads in traditional search.
How we got here
On July 15, Google said its AI Mode ads were displayed on close to 30% of all search queries. Then, on August 31, Google added shopping carousel ads to AI Mode results, and on October 19 it began showing advertisements alongside Personal Intelligence responses, reversing its March commitment to keep ads out of AI Mode. On October 28 and 29, Google reported that Search revenue growth had slowed to 12% and cited lower AI Mode monetization, while advertisers still could not see AI Mode pricing because no paid click or CPC data was available, and Alphabet said ads in AI Mode would reach 10 more markets. Now, on October 29, Google's chief business officer said on the earnings call that ads in AI Mode monetize lower than ads in traditional search.
Summary of earlier coverage
- Oct 29Alphabet's Q3 ad revenue rises 10.5% as AI Mode ads expand to 10 more markets
Alphabet's Q3 ad revenue rose 10.5% to about $82 billion, and Google said ads in AI Mode will reach 10 more markets.
- Oct 28Google Search Revenue Growth Slows for a Second Straight Quarter
Google said Search revenue growth slowed for a second consecutive quarter, citing lower AI Mode monetization as one reason.
- Oct 19Google reverses course: ads now showing in AI Mode search results with Personal Intelligence
Google reversed its March commitment to keep ads out of AI Mode results, now showing advertisements alongside Personal Intelligence responses.
- Jul 15Google AI Mode ads now appearing on nearly 30% of all search queries
Google's AI Mode ads are now displayed on close to 30% of all search queries, reflecting the company's expanding push to integrate AI-generated content into search results.