By Thorsten Meyer | October 29, 2026 | ThorstenMeyerAI.com
Get business pricing on tech for your team
- Business-only prices and quantity discounts
- Tax-exempt purchasing
- Multiple users, one account, clear invoices
Ask Google why your pool turned green, and the answer explains how to test the water, brush the walls and vacuum the debris. Then, inside that same answer, it can show you a pool vacuum you can buy. That is not my invented example. It is the example Google itself uses to explain to advertisers how ads find their way into AI answers.
On Wednesday, October 28, Google said it is taking those ads to ten more countries and, in the US, into follow-up questions. The same evening, Alphabet reported that its search advertising business grew only 12%, down from 17% the quarter before. The two announcements belong together. This piece explains what changes for advertisers, for publishers who live from search traffic, and for you as a user who wants to tell an ad from an answer.
A transparency note before we start: thorstenmeyerai.com is part of a network of publisher websites that earns money when readers arrive from search engines, partly through affiliate links. So I have a stake in this story. I keep Google’s claims, independent research and my own reading clearly apart, and I say which is which.
Key takeaways
- Ads move into the answer, in more places. Google is scaling ads in AI Mode, its chat-style search, to Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines and Singapore. Brazil, Mexico and the United Kingdom are planned for the fourth quarter of 2026. In the US, ads now also appear in answers to follow-up questions (Google, October 28).
- The money pressure is real. Revenue from Google Search & other grew 12% to $63.4 billion in July to September, after 17%, 19% and 17% in the three quarters before. Google named exchange rates as the biggest reason, and also the “lower monetization” of fast-growing AI Mode searches.
- Advertisers cannot opt out. Existing Search, Shopping and Performance Max campaigns take part automatically. There is no separate targeting or opt-out, results are reported only in aggregate, and Google’s AI writes short “explainers” next to ads that advertisers cannot edit (Google Ads Help).
- Publishers lose clicks, ads may not. In a randomized experiment with 1,065 US users, AI Overviews cut clicks to websites by 39.8% when they appeared, while clicks on ads showed no measurable change (Agarwal and Sen, working paper, 2026).
- For users, the word to look for is “Sponsored”. Google says every ad in AI answers carries that label and that ads do not influence the AI’s own answer. That second part is Google’s claim. I found no independent audit of it.
- Not in Europe yet. Google’s help page lists 12 countries for ads inside AI answers, English only. Germany and the rest of the EU are not on it (as of October 29).
Products Worth Considering
LG 34GX90SA-W 34-inch Ultragear WQHD OLED Curved Gaming Monitor
Samsung 27-inch Odyssey OLED G6 QD-OLED QHD Gaming Monitor
Samsung 27-Inch Odyssey QD-OLED G8 4K 240Hz Gaming Monitor
As an affiliate, we earn on qualifying purchases.
What Google announced
Two AI features matter here. AI Overviews are the AI summaries that appear at the top of many normal Google results. AI Mode is a separate, chat-like search where you can ask long questions and follow-up questions. Both now carry ads.
The step-by-step history, from Google’s own posts: ads inside AI Overviews went live for mobile users in the US in October 2024. In May 2025, they came to desktop, and Google began testing ads in AI Mode. In May 2026, at Google Marketing Live, Google started testing two new formats: “Conversational Discovery ads”, where Gemini builds ad text tailored to your specific question, and “Highlighted Answers”, where an ad can appear inside a list of AI recommendations.
The October 28 announcement, by Shashi Thakur, who runs Google’s search ads, adds three things:
- Ten new countries for ads in AI Mode, all listed above. More follow in the fourth quarter, including Brazil, Mexico and the UK.
- “Multiturn ads” in the US. Google is launching them “to allow ads in follow-up queries in AI Mode.” In plain words: the second and third question of a conversation can now carry an ad, not only the first.
- A promise on labels. “Ads will be clearly labeled as ‘Sponsored’.”
Google backs the move with two claims. AI Mode queries are on average three times longer than classic searches, which gives Google more to read about what you want. And click-through rates are “already similar between sponsored and organic product list items within AI Mode.” The footnote matters: that comparison comes from Google’s internal US data for August 20 to September 3, 2026. It compares ads with unpaid product listings inside AI Mode. It says nothing about clicks to websites.
Infographic 01 · From test to global
The answer now carries the ad, in more places.
How Google moved ads into its AI answers in two years, where they show today, and the revenue pressure behind the move.
Where ads appear inside AI answers
Per Google’s help page and the 28 Oct post. The list “may not be exhaustive”.
Follow-up questions (“multiturn ads”): US only. Germany and the rest of the EU: not listed. Ads above or below AI Overviews can show wherever AI Overviews exist (200+ countries and territories).
Why now: Google Search & other revenue growth
Year over year, as reported by Alphabet. Bars scaled to 19%.
Q2 to Q3 2026: about +0.1%. Same months a year earlier: about +4.4% (my arithmetic). Google names exchange rates as the largest driver of the slowdown, and the “lower monetization” of AI Mode as one factor.
- 3 Oct 2024Ads inside AI Overviews go liveUS, mobile, after months of testing
- 21 May 2025Desktop in the US; first tests in AI ModeEnglish-speaking countries announced for later in 2025
- 20 May 2026New formats in testingConversational Discovery ads and Highlighted Answers, both with a Gemini-written “AI explainer”
- 28 Oct 2026AI Mode ads in 10 more countriesPlus “multiturn ads” in follow-up questions in the US; labeled “Sponsored”
- Q4 2026Planned: Brazil, Mexico, United Kingdom“Additional locales, including” these three
Sources: Google, 28 Oct 2026; Google Ads Help, accessed 29 Oct 2026; Google, 3 Oct 2024; Google, 21 May 2025; Google, 20 May 2026; Alphabet Q3 2026 release and the Q4 2025, Q1 2026 and Q2 2026 releases. “3× longer” is Google’s AI Mode report (US, May 2026). Quarter-on-quarter changes and bar scaling: Thorsten Meyer.
Powered by Thorsten Meyer AI
Why now: the money machine is slowing
Google Search is still Alphabet’s biggest business. In the third quarter, it brought in $63.4 billion, about half of Alphabet’s revenue (Alphabet release). But the growth rate fell:
- Q4 2025: $63.1 billion, +17%
- Q1 2026: $60.4 billion, +19%
- Q2 2026: $63.3 billion, +17%
- Q3 2026: $63.4 billion, +12%
From the second to the third quarter, search revenue barely moved, up about 0.1%. A year earlier, it rose about 4.4% over the same months. Both are my arithmetic from Alphabet’s releases.
On the earnings call, chief business officer Philipp Schindler gave several reasons. Exchange rates were “the single largest driver.” Some retail advertisers in Asia were hit when the EU ended its duty exemption for small parcels, and media and entertainment spending normalized after a strong World Cup quarter. Then he added: “the strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI mode.”
That is the core of this story. More people search more than ever. Alphabet says its query growth is the highest in five years. But a growing share of those questions lands in a format that, so far, earns less per question. Google’s answer is to put ads into that format, in more countries and more turns of the conversation. Schindler said Google is now scaling “high-quality ads” in AI Overviews and AI Mode to more users and queries: “This includes taking our monetization footprint global for the first time.”
What the miss meant for Alphabet’s cash, its debt and its share price, I covered this morning in Same Night, Opposite Verdicts. This piece stays with the ads.
How an ad gets into an answer
Google’s help page for advertisers is the most concrete document on this, and it is worth reading in full. Here is how it works, in short:
- Two ways to match. An ad can match your question directly, if you search for something commercial like “pool vacuum cleaners”. Or it can match “contextually to both the user’s query and the AI response”. That second path is new: the ad is chosen partly by what the AI just told you.
- Not every campaign gets both. Broad match, AI Max, Shopping and Performance Max campaigns are eligible for both paths. Exact and phrase match keywords only show on direct commercial searches.
- AI explainers. Next to some ads, Google’s Gemini models write a short text that explains how the ad relates to your question, using your query, the AI answer and public sources, “including your website”. Advertisers “can’t manually write, edit, approve, or opt out of them.”
- Same auction, same price model. Advertisers pay per click or per conversion as in normal search ads, with no surcharge. An ad can appear above an AI Overview and inside it on the same search.
- No opt-out. “You can’t target ads exclusively to AI Overviews or AI Mode, or opt out of showing ads in them separately from Search.”
- Aggregate reporting. Clicks and costs from AI Overviews and AI Mode are mixed into the normal campaign reports.
Think of a shop assistant who answers your question honestly and then points to a shelf. The shelf space is paid for, and there is a small sign that says so. The question for everyone is how big that sign is, and whether the assistant’s answer stays independent of who paid for the shelf. Google says it does: “Paid advertising does not influence the organic responses generated by Google AI.”
What publishers see
Here is my stake again: sites like this one were paid, indirectly, by the clicks that Google’s ten blue links used to send. The AI answer changes that deal. What does the evidence say? Four studies, from the most rigorous to the least:
- A randomized experiment (2026). Saharsh Agarwal (Indian School of Business) and Ananya Sen (Carnegie Mellon) gave 1,065 US desktop Chrome users a browser extension and randomly hid AI Overviews for some of them, from January 7 to February 10, 2026. When an AI Overview appeared, clicks to websites fell by 39.8%, from 0.62 to 0.37 per search, and searches ending without any click rose by 34.5%. Clicks on ads showed no measurable change, but they were rare in the sample, about 0.02 per search. Users did not rate their search experience any better with AI Overviews. An exploratory AI Mode group suggested even larger traffic losses. The paper is a working paper, not yet peer-reviewed (SSRN).
- Pew Research Center (July 2025). In the browsing data of 900 US adults from March 2025, people clicked a normal search result on 8% of visits when an AI summary appeared, against 15% without one. They clicked a link inside the summary on just 1% of visits (Pew).
- Ahrefs (February 2026). The SEO tool vendor compared 300,000 keywords on desktop and estimated that an AI Overview now goes along with a 58% lower click rate for the top-ranked page (Ahrefs). That is a correlation, not proof of cause.
- Seer Interactive (April 2026). The agency’s client data shows the decline slowed and partly reversed in early 2026: the organic click rate on searches with AI Overviews rose from a low of 1.3% in December 2025 to 2.4% in February 2026. It also found that informational comparison searches (“X vs Y”) showed an AI Overview 95.4% of the time, and that being cited in the overview goes along with 120% more clicks per impression (Seer).
Google disagrees with the alarm. In August 2025, its head of Search wrote that “total organic click volume from Google Search to websites has been relatively stable year-over-year” and that clicks are of higher quality (Google). Google did not publish the underlying numbers. The randomized study found no difference in how long visitors stayed on a website after a click.
My reading: the experiment points at the uncomfortable part. The clicks that AI Overviews remove came from the publishers’ side of the page, while the ad side held steady. If ads now move into the answer itself, Google gets a second chance to earn from the reader who no longer leaves. That is a good business for Google. Whether it is a fair one for the people who wrote what the AI summarizes is exactly what the European Commission is examining: in December 2025 it opened an antitrust investigation into whether Google uses publishers’ content for AI Overviews and AI Mode without appropriate compensation and without a way to refuse that does not cost them their place in Search (CNBC).
Infographic 02 · What happens to clicks
When the AI answers, fewer people click through.
Four studies of very different quality, from the most rigorous to the least, plus Google’s own view. Most measure AI Overviews in the US, not AI Mode.
Clicks to websites per search, when an AI Overview would appear
AI Overview hidden vs. shown. Bars scaled to 0.62.
Searches without any click: +34.5%. Clicks on ads: no measurable change, but rare (about 0.02 per search). Working paper, not yet peer-reviewed. Source: Agarwal and Sen, SSRN working paper, 2026.
Visits with a click on a normal search result
Share of visits to a Google results page. Bars scaled to 15%.
Correlation, not proof of cause. Source: Pew Research Center, 22 Jul 2025.
Ahrefs: −58%
Estimated lower click rate for the top-ranked page when an AI Overview appears. 300,000 keywords, desktop, Dec 2025 vs. Dec 2023. Ahrefs, 4 Feb 2026.
Seer: 1.3% → 2.4%
Organic click rate on searches with AI Overviews, Dec 2025 to Feb 2026: the decline paused and partly reversed. Being cited goes along with +120% clicks per impression. Seer Interactive, 24 Apr 2026.
“Relatively stable”
Google says total organic clicks to websites were stable year over year and of higher quality. It published no underlying numbers. Google, 6 Aug 2025.
The clicks the AI answer removes come from the publishers’ side of the page. The ad side held steady.Thorsten Meyer · my reading of the randomized study
Sources: Agarwal and Sen, SSRN working paper, 2026; Pew Research Center, 22 Jul 2025; Ahrefs, 4 Feb 2026; Seer Interactive, 24 Apr 2026; Google, 6 Aug 2025. Labels on study quality and bar scaling: Thorsten Meyer.
Powered by Thorsten Meyer AI
What this means for companies
If you buy search ads:
- You are already in. If you run Search, Shopping or Performance Max campaigns, your ads can appear in AI answers in the listed countries. Check your search terms report and your negative keywords now.
- Choose your match types on purpose. Broad match and AI Max reach the new contextual matching. Exact and phrase match keep you to direct commercial searches. That is a real control, even without an opt-out.
- Measure what you pay for yourself. AI placements are mixed into your reports. Use holdout tests, by region or campaign, and judge conversions and margins, not click rates.
- Keep your website and product data accurate. Google’s AI explainers draw on public sources, including your site, and you cannot edit them. An outdated price or spec on your site can end up next to your ad.
- Read Google’s numbers carefully. “Similar click-through rates” covers two weeks of US data and compares ads with unpaid product listings. It is not a forecast for your account.
If your business lives from search traffic:
- Plan for fewer clicks per informational search. Question and comparison content is most exposed. Model your traffic as if a share of it will not come back.
- Be the source the AI cites. Being cited goes along with more clicks than not being cited, though still fewer than a page without an AI Overview. I wrote about why this ground is unstable in The citation.
- Build direct relationships. Newsletters, communities, apps and other search engines reduce your dependence on one gatekeeper. The bigger picture is in The referral.
- Watch who owns the customer. Ads in answers and AI shopping agents are two sides of the same shift, as I described in Amazon Blocks AI Shopping Agents, Walmart Lets Them In.
What this means for users
- Look for “Sponsored”. Google says every ad in AI Overviews and AI Mode carries this label and is visually set apart from the answer. If something recommends a product and you are not sure, look for the label before you click.
- The text next to an ad is not a neutral review. It may be an “AI explainer” written by Google’s AI to say why the ad fits your question. Google calls it independent. It still sits next to a paid placement, so read it as part of the ad.
- Follow-up questions can carry ads too, for now in the US. A conversation does not become ad-free after the first answer.
- “Ads don’t change the answer” is Google’s promise. I found no independent audit that checks it. Treat it like any company promise: plausible, not proven.
- Check the sources for decisions that matter. For health, money and big purchases, open the cited pages and compare outside Google before you buy.
- In Germany and the rest of the EU, ads can appear above or below AI Overviews, as in normal search, but not inside AI answers, according to Google’s current help page. That can change quickly.
Infographic 03 · Ads vs. answers
How to tell the ad from the answer.
What an ad inside an AI answer is made of, four checks for users, and the first steps for advertisers and publishers.
How an ad looks inside an AI answer
Schematic, based on Google’s description. Not a screenshot; layouts change.
Ad: advertiser’s headline, price, link
Google’s example question: “why is my pool green and how do I clean it?” Ads can be matched to your question and to the AI’s answer. Source: Google Ads Help, accessed 29 Oct 2026.
For users: four checks
- Look for the word Sponsored before you click a recommendation.
- Read the AI explainer as part of the ad, not as a neutral review.
- Follow-up questions can carry ads too (US, multiturn ads).
- For health, money and big purchases: open the cited sources and compare outside Google.
Google says ads do not influence the organic AI answer. I found no independent audit of that claim.
For advertisers
- Search, Shopping and Performance Max campaigns take part automatically. There is no separate opt-out.
- Broad match and AI Max reach contextual matching; exact and phrase match only direct commercial searches.
- AI placements are mixed into normal reports: measure with holdout tests and conversions.
- Keep website and product data accurate: AI explainers draw on them.
For publishers
- Expect fewer clicks per informational search; question and comparison pages are most exposed.
- Aim to be cited in the AI answer: it goes along with more clicks than not being cited.
- Build direct channels: newsletter, community, other search engines.
- Watch the EU: an antitrust investigation into Google’s use of publisher content for AI has been open since December 2025.
Sources: Google Ads Help, accessed 29 Oct 2026; Google, 28 Oct 2026; Agarwal and Sen, SSRN working paper, 2026; Seer Interactive, 24 Apr 2026. Checklists and schematic: Thorsten Meyer.
Powered by Thorsten Meyer AI
Honest limits
- Google’s numbers are Google’s. The click-through comparison is internal US data from two weeks. “People are comfortable with ads in AI Mode” comes from Google’s own user research, which it has not published.
- The call quotes come from a third-party transcript (TradingKey). I checked the key lines against TechCrunch’s report of the call.
- The studies mostly measure AI Overviews, not AI Mode. They are mostly US and desktop. The randomized study is a working paper, and ad clicks were rare in its sample. The vendor studies show correlations, and Seer saw a partial rebound in early 2026.
- The slowdown has several causes. Google names exchange rates first. AI Mode is one factor among several, not the whole story.
- I could not see these ads myself. They are not shown in Germany, where I work, so I rely on Google’s documentation for how they look.
- My stake. As said at the top, this site belongs to a publisher network that depends partly on search traffic.
Related on Thorsten Meyer AI
- Same Night, Opposite Verdicts: Why Investors Rewarded Microsoft and Punished Alphabet
- Amazon Blocks AI Shopping Agents, Walmart Lets Them In. Who Owns the Customer When an AI Buys?
- The referral. How AI search severs the content-for-traffic contract that funded the open web
- The citation. Why generative engine optimization rewards the same brand on the least stable ground
- Gemini 4 Carbon Is the New #1 AI Model, by One Point. Here Is What the Ranking Leaves Out
Sources
- Google, Ads in AI Mode expand to new markets, Shashi Thakur (October 28, 2026), including footnotes on Google internal data
- Google Ads Help, About ads in AI-powered experiences in Google Search (accessed October 29, 2026)
- Google, A new generation of ads for the AI era of Search (May 20, 2026)
- Google, New ways AI in Search helps your business (May 21, 2025) and New ways for marketers to reach customers with AI Overviews and Lens (October 3, 2024)
- Alphabet, Q3 2026 results, Exhibit 99.1 to Form 8-K (October 28, 2026), plus the Q2 2026, Q1 2026 and Q4 2025 releases
- Alphabet Q3 2026 earnings call, remarks by Sundar Pichai and Philipp Schindler, third-party transcript via TradingKey (October 28, 2026)
- TechCrunch, Google expands AI Search ads globally as core ad growth slows (October 28, 2026)
- Saharsh Agarwal and Ananya Sen, The Impact of Google AI Overviews on Publisher Traffic and User Experience: Evidence from a Field Experiment, SSRN working paper (posted April 3, 2026; draft of June 17, 2026); abstract also at Toulouse School of Economics
- Pew Research Center, Google users are less likely to click on links when an AI summary appears in the results (July 22, 2025)
- Ahrefs, Update: AI Overviews Reduce Clicks by 58% (February 4, 2026)
- Seer Interactive, AIO Impact on Google CTR: 2026 Update (April 24, 2026)
- Google, AI in Search is driving more queries and higher quality clicks, Liz Reid (August 6, 2025)
- CNBC, Google hit with EU antitrust investigation over use of online content for AI (December 9, 2025)
