What happened
Google said it is scaling high-quality ads within AI Overviews in AI Mode to more users and queries, taking its monetization footprint global for the first time, alongside multi-turn ads and AI Mode in the U.S. Chief business officer Philipp Schindler announced the expansion on Alphabet's third-quarter earnings call.
Why it matters
The company says early results suggest the formats are working, with click-through rates for sponsored product listings in AI Mode already comparable to organic listings, and user research indicating people find the ads relevant. That gives Google evidence its AI search features can carry advertising as it seeks new revenue sources.
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The timing of Google's international ad expansion is tied directly to the pressure visible in its latest earnings. Search advertising growth decelerated for a third straight quarter — from 19% in the first quarter to 17% in the second and 12% in the third — and Alphabet shares fell 8% after the results, putting added pressure on the company to turn its AI features into a meaningful source of ad revenue.
Google is framing the AI formats as already viable. Schindler said click-through rates for sponsored product listings in AI Mode are comparable to organic listings, and the company's user research indicates people find the ads relevant. The expansion builds on May's announcement of Gemini-powered ad formats, including conversational discovery ads that respond to users' questions and sponsored recommendations integrated into AI-generated answers.
Search behavior itself is shifting in ways that support the ad push. CEO Sundar Pichai said queries grew at their fastest year-over-year rate in five years, and that AI Mode queries are three times longer on average than traditional searches, with one in five AI Mode searches globally involving voice, images, or documents. Google also surpassed 50 billion visual searches per month. The quarter included the release of Gemini 4 Argon, growth of the Gemini app to 1 billion monthly users, and the launch of the Pixel 11 lineup.
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