Google expands AI Search ads globally as core ad growth slows
Google is bringing ads to its AI-powered Search tools in more countries. The company hopes that generative AI, which can create answers and content, will help it make more money from ads. This comes as growth in its main search advertising business is slowing down.
The announcement came on Wednesday during Alphabet’s third-quarter earnings call. Alphabet reported $127.6 billion in revenue, a 25% increase from the same period last year. However, growth in Search advertising continued to slow, and Alphabet’s shares fell 8% after the results were announced.
Google Search revenue grew 12% year over year in the third quarter. This was slower than the 17% growth in the second quarter and the 19% growth in the first quarter. As growth slows, Google faces more pressure to turn its growing range of AI features into a major source of advertising income.
“We are now scaling high-quality ads within AI overviews in AI mode to more users and queries,” Philipp Schindler, Google’s chief business officer, said during the call with investors. “This includes taking our monetization footprint global for the first time. Today, we’re announcing the expansion of ads in AI mode into international markets alongside multi-turn ads and AI mode in the U.S.”
Google says early results show that these ad formats are working. According to Schindler, sponsored product listings in AI Mode get clicks at rates similar to regular, unpaid listings. The company’s research also suggests that users find these ads relevant to them.
The move builds on Google’s announcement in May of new ad formats powered by Gemini. These include conversational discovery ads, which respond to users’ questions, and sponsored recommendations shown within answers created by AI.
Google CEO Sundar Pichai also said that the number of Search queries grew faster year over year than at any point in the past five years. He did not share the exact growth rate. He said AI features are changing how people use Search, encouraging them to ask longer and more complex questions.
Queries in AI Mode are three times longer on average than traditional searches, Pichai said. He also said that one in five AI Mode searches worldwide involves voice, images, or documents. Google now handles more than 50 billion visual searches each month.
“[Search] is bringing the benefits of AI to more people than any other product in the world,” Pichai told investors. “People are using our AI features more, searching in entirely new ways. Their queries are longer, personalized, and multimodal.”
Alphabet’s Google Services division, which includes Search, brought in $96.3 billion in revenue, up 11% from the same period last year. Google Cloud revenue jumped 103% to $30.7 billion.
The results come after a busy quarter for Google. The company released Gemini 4 Argon, its Gemini app grew to one billion monthly users, and Google launched its Pixel 11 lineup.