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Google Takes AI Search Ads Global as Core Search Growth Slows to 12%
Google is expanding advertising inside its AI Mode and AI Overviews search experiences to international markets for the first time, announced during Alphabet's third-quarter earnings call.
The expansion, disclosed on Wednesday's investor call, brings ads in AI Mode to markets outside the United States, alongside multi-turn ads and AI Mode availability in the U.S. Philipp Schindler, Google's chief business officer, said the company is scaling high-quality ads within AI Overviews in AI Mode across more users and queries, describing it as the first time the monetization footprint is going global.
Alphabet reported third-quarter revenue of $127.6 billion, up 25% year over year. Within that, Google Search revenue rose 12% from a year earlier, decelerating from 17% growth in the second quarter and 19% in the first quarter. Alphabet shares dropped 8% following the release.
The widening gap between overall revenue growth and search advertising growth puts pressure on Google to convert its generative AI search features into a material ad business. The company said early signals from the AI ad formats are encouraging.
According to Schindler, click-through rates for sponsored product listings in AI Mode are already comparable to those for organic listings, and internal user research indicates people find the ads relevant.
The international rollout extends a monetization model Google had previously confined to the U.S., attaching advertising to AI-generated search summaries and conversational results rather than only to traditional link-based results.