Google is significantly expanding the presence of advertisements within its AI-powered Search results, rolling out this monetization strategy to international markets, including India. This move comes as the tech giant seeks to offset a notable slowdown in the growth of its traditional search advertising business.
During Alphabet's (Google's parent company) third-quarter earnings call, executives highlighted a declining trend in search revenue growth. While Alphabet reported a robust $127.6 billion in Q3 revenue, a 25% increase year-over-year, its advertising growth specifically saw a steep decline: from 19% in Q1 to 17% in Q2, and further to 12% in Q3. This deceleration led to an 8% dip in company shares post-results.
Global Expansion of AI Ad Monetization
Philipp Schindler, Google’s chief business officer, confirmed the global scaling of high-quality ads within AI overviews and AI Mode during the investor call. He stated, “We are now scaling high-quality ads within AI overviews in AI mode to more users and queries. This includes taking our monetization footprint global for the first time.”
Google initially began testing ads in AI Mode in the United States in May 2025. Early results have been promising, with sponsored product listings in AI Mode reportedly receiving more clicks than organic listings, and users finding these ads relevant. The company is also developing new advertising formats, leveraging its Gemini AI, including conversational discovery ads designed to respond to user questions as they explore products, and sponsored recommendations integrated into AI-generated answers.
Evolving Search Experience and Commercial Queries
Google CEO Sundar Pichai emphasized the company’s dual focus on refining the Google Search experience while enhancing monetization. He noted that investments in AI are fundamentally changing how people interact with search, leading to longer, more personalized, and multimodal queries. Pichai also highlighted a five-year high in the growth rate of commercial searches, such as “best laptop under ₹50,000” or “where to buy running shoes.”
“We are building one seamless experience across AI Overviews, AI Mode and traditional Search, and people are using our AI features more, searching in entirely new ways,” Pichai added, underscoring the integration of AI capabilities across the entire search ecosystem.