Google plans to integrate ads into its new AI search feature, AI Mode, which allows for multiple searches and provides detailed responses to complex queries. Although ads are not currently available in AI Mode, Google aims to utilize insights from AI Overviews, where ads are already incorporated, to shape its advertising strategy in AI Mode.
Ads in AI Overviews, which appear beneath AI-generated responses, are sourced from existing Search and Shopping campaigns and are designed to align with user queries. These ads have shown positive consumer feedback since their introduction in October, with reports of higher click-through rates compared to traditional web listings.
However, advertisers express concerns that the effectiveness of ads in AI Overviews may not translate to AI Mode. Experts like Melissa Mackey and Navah Hopkins highlight that ads in AI Mode could be perceived as intrusive, making it challenging to capture user attention. They predict that click-through rates may be lower due to the conversational nature of AI Mode, which encourages users to engage in follow-up questions rather than click on ads.
Additionally, AI-driven search experiences like AI Mode may be classified as premium inventory, potentially leading to higher costs per click. This combination of lower click-through rates and increased costs could result in diminished returns on ad spend. Without clear insights into auction dynamics or ad formats, predicting the performance and adoption of ads in AI Mode remains difficult.
