Google's Search Ad Growth Slows as Its Own AI Mode Weighs on Stock; Meta Gains Share
TLDR
Google's stock fell more than 10% after its Q3 earnings call last month, driven mainly by a major slowdown in search advertising growth that the article attributes to Google's own AI Mode.
Optimixed Overview
Optimixed's original report on this story.
Google's stock dropped more than 10% after its Q3 earnings call last month, mostly due to a major slowdown in search advertising growth. AdExchanger ties that slowdown to Google's own AI Mode, and its headline adds that Meta is benefiting while chatbot ad formats begin to multiply.
How we got here: earlier coverage
On October 28, Google said its Search revenue growth had slowed for a second consecutive quarter, and it pointed to lower monetization of ads in AI Mode. On October 29, Alphabet reported Q3 ad revenue up 10.5% to about $82 billion and said AI Mode ads would expand to 10 more markets, while its chief business officer said on the call that AI Mode ads monetize lower than traditional search ads. On November 4, a single X post showed Google's AI Mode button missing. Now, the article says Google's stock fell more than 10% after its October earnings call, driven mainly by a sharp slowdown in search advertising growth that it attributes to AI Mode, and it notes Meta gaining.
Summary of earlier coverage
- Nov 1Google's Search Dominance Faces Pressure as Users Shift to AI Chatbots
Google may be losing its hold on discovery as more users turn to AI chatbots such as ChatGPT and Claude for answers, a shift that could hurt the company's bottom line.
- Oct 29Google's Core Ad Revenue Growth Slows in Q3 Even as AI Search Drives Higher Query Volume
Google's core ad revenue growth slowed in Q3 even though query volume rose, driven by AI features.
- 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.