Google briefs brands on AI Mode ads ahead of Q4 rollout

Google is preparing to scale up ads in AI Mode, by briefing agencies and brands on how the new ad format works and how it differs from traditional search.

Driving the news. A new internal document, first reported on by Ad Age, outlines how ads in AI Mode will function. The company says it will target ads based not just on a user’s query, but on the entire context of the AI conversation, marking a departure from traditional keyword-based targeting.

• The guide includes a section titled “Ads in AI Mode,” detailing how exploratory and complex user queries will influence ad placements.
• “The big shift is from queries to conversations,” a marketing exec familiar with the rollout told Ad Age

Why we care. Google’s transition from static search to conversational, AI-driven results is a massive shift that’s bringing advertisers along for the ride. This changes how ads are targeted and placed, relying on the full context of the AI exchange rather than just keywords. With over 100 million users already engaging in AI Mode and ads set to expand before Q4, brands that adapt early will be better positioned to reach high-intent consumers in this emerging search experience.

Catch up quick. Google introduced AI Mode – an evolution of AI Overviews – at its I/O and Marketing Live events in May. Unlike standard search results, AI Mode delivers rich, conversational responses, similar to what users experience on ChatGPT.

• Google is already showing ads within AI Mode.
• Broader ad placement is expected before Q4, according to sources familiar with the plan.

Between the lines. Google must urgently balance innovation with revenue protection. Search ads are still Google’s cash cow, and the company is navigating how to maintain their effectiveness as user behavior shifts.

• Ad formats in AI Mode will remain text- and product-based, similar to search and shopping ads.
• Advertisers using Performance Max or the newer AI Max for Search will see their ads appear in AI Mode.
• Google stresses the importance of “feed hygiene” – making sure product data is current and accurate.

The big picture:
While Google is ahead of rivals in monetizing AI search, it’s entering uncharted waters. Key questions remain about how users interact with ads in AI-driven environments:

• Will consumers click on AI-suggested links the way they do in traditional search?
• If not, can models like CPM (cost per thousand impressions) replace pay-per-click?

“One of the big questions is what the future economic model of search looks like,” said another executive briefed on Google’s plans.

What’s next. Google is expected to expand AI Mode ads in time for the crucial holiday marketing season, and it’s working closely with partners to fine-tune placements ahead of that push.

• “We’re seeing incredible value,” a Google spokesperson told Ad Age. “And we are excited to share with our partners how they can also be discovered and connect with customers in AI Mode.”