The Three Surfaces Where Google Shows AI Ads
Google is placing ads in THREE different AI-powered experiences. Understanding the difference is critical:
1. AI Overviews
The AI-generated summaries at the top of regular Google Search results. Already live in 200+ countries, 1B+ users monthly. Ads appear as "Sponsored" links within or below the overview.
2. AI Mode
A dedicated conversational search interface (like ChatGPT) within Google Search. Currently in US testing. Features deeper, multi-turn conversations. Ads appear as product carousels, Direct Offers, and sponsored suggestions.
3. Gemini App
Google's standalone AI chatbot (gemini.google.com). Currently NO ads. Google publicly denied Dec 2025 reports claiming ads were coming to Gemini in 2026. However, Gemini now has checkout capability via Universal Commerce Protocol.
AI Overviews — The Numbers
| Metric | Data |
|---|---|
| Global reach | 1B+ monthly users across 200+ countries |
| Frequency (peak July 2025) | ~25% of queries triggered AI Overviews |
| Frequency (Nov 2025) | ~16% of queries (pulled back from peak) |
| Ads alongside AI Overviews | ~40% of AI Overview SERPs (up from 3% in Jan 2025) |
| Ads inside AI Overviews | 0.052% frequency (just 13 instances in 25,000 SERPs tested) |
| Countries with AI Overview ads | 12 (US + 11 English-speaking markets as of Dec 2025) |
Key insight: Ads ALONGSIDE AI Overviews are common (40%). Ads INSIDE AI Overviews are still extremely rare (0.052%). Google is being cautious.
The CTR Impact — What's Really Happening
Seer Interactive analyzed 3,119 queries across 42 organizations (June 2024 - Sept 2025):
| Metric | Before AI Overviews | With AI Overviews | Change |
|---|---|---|---|
| Organic CTR | 1.76% | 0.61% | -61% |
| Paid CTR | 19.7% | 6.34% | -68% |
| Paid CTR (July 2025 crash) | ~11% | ~3% | -73% in one month |
BUT — brands cited IN AI Overviews see the opposite effect:
- •+35% higher organic CTR
- •+91% higher paid CTR
The takeaway: Getting cited in AI Overviews is now MORE valuable than traditional ranking.
AI Mode — The New Frontier (January 2026)
Google announced major AI Mode updates on January 11-12, 2026 at NRF (National Retail Federation):
Direct Offers (NEW)
A new Google Ads pilot that lets advertisers present exclusive discounts when AI detects a shopper is ready to buy.
How it works:
- •User asks AI Mode: "I'm looking for a modern rug for a high-traffic dining room"
- •AI suggests products based on criteria
- •If a user shows buying intent, your Direct Offer (e.g., "20% off") can appear
- •Think of it as a salesperson negotiating a deal on the user's behalf
Status: Testing with select advertisers. Will expand beyond discounts to bundles, free shipping, and other incentives.
Business Agent (NEW)
A branded AI assistant that lets shoppers chat directly with retailers inside Google Search.
How it works:
- •Users can ask questions to brands like Lowe's directly within AI Mode
- •Brand's AI agent responds in the brand's voice
- •Example: "What's the difference between these floor tiles?" — answered by Lowe's AI, not generic Google AI
Status: Available to select retailers starting January 12, 2026
Checkout in AI Mode and Gemini (NEW)
Powered by Google's new Universal Commerce Protocol (UCP), co-developed with Shopify.
How it works:
- •User finds product in AI Mode or Gemini app
- •Taps "Buy" on eligible Google product listing
- •Checkout pre-filled with Google Pay / Google Wallet info
- •PayPal support coming soon
- •Retailers remain seller of record
UCP Partners:
- •Development: Shopify, Wayfair, Target, Walmart
- •Endorsed by: Adyen, American Express, Best Buy, Flipkart, Macy's, Mastercard, Stripe, The Home Depot, Visa, Zalando (20+ companies)
How to Access Google AI Ads
You don't need a separate platform. Enable AI Max for Search in your existing Google Ads account:
- Open Google Ads
- Navigate to your Search campaign
- Go to Settings → AI Max for Search Campaigns
- Toggle ON
Your existing Search, Shopping, and Performance Max ads automatically become eligible for AI Overview and AI Mode placements.
AI Max Performance Data
Google's official benchmarks (May 2025 launch):
| Metric | Result |
|---|---|
| Average conversion lift | +14% at similar CPA |
| Lift for exact/phrase match campaigns | +27% |
| L'Oreal conversion rate | +100% (doubled) |
| L'Oreal cost per conversion | -31% |
| MyConnect leads | +16% |
| MyConnect cost per lead | -13% |
| MyConnect conversions from NEW queries | +30% |
Reality check: Independent testing (Monks Agency) found 99% of AI Max impressions had zero conversions across ~30,000 search terms. Results vary significantly by account.
What AI Max Actually Does
- •Search term matching: Expands beyond your keywords using broad match and keywordless technology
- •Text asset generation: Creates headline/description variations automatically
- •Final URL expansion: Sends users to relevant landing pages you didn't specify
- •Cross-surface delivery: Shows ads in traditional search, AI Overviews, and AI Mode
New reporting (Sept 2025): Search terms report now shows "AI Max" as a match type, plus headlines served and URLs visited.
Smart Bidding Exploration
A new feature that lets Google's AI explore beyond your current targeting to find incremental conversions.
Performance: Campaigns using Smart Bidding Exploration see average +18% increase in unique search query categories with conversions and +19% increase in overall conversions.
The Gemini Question — Ads or No Ads?
What happened:
- •Dec 8, 2025: AdWeek reported Google told advertisers Gemini would get ads in 2026
- •Dec 8, 2025 (same day): Google VP Dan Taylor publicly denied it on X: "There are no ads in the Gemini app and there are no current plans to change that."
The reality:
- •Gemini app: NO ADS planned
- •AI Mode (within Google Search): ADS ARE LIVE and expanding
- •Gemini checkout: YES — users can now purchase products via Universal Commerce Protocol
For advertisers, the distinction matters: Focus on AI Mode and AI Overviews, not the Gemini app.
Countries Where AI Overview Ads Are Live
As of December 19, 2025 (expanded quietly without announcement):
All English-language markets. Available on mobile AND desktop.
The Reporting Gap (Still Not Fixed)
Major limitation: Google does NOT provide separate metrics for AI Overview vs. standard search placements.
You can see:
- •Total campaign performance
- •"AI Max" match type in search terms report
You CANNOT see:
- •How many impressions came from AI Overviews specifically
- •AI Overview CTR vs. standard search CTR
- •Conversion rate by AI surface
Expected fix: Q2-Q3 2026 based on Google's roadmap statements.
Minimum Requirements for AI Max
| Requirement | Minimum | Recommended |
|---|---|---|
| Daily budget | $50/day | $750/day (15x target CPA) |
| Monthly conversions | 30+ | 100+ |
| Conversion tracking | Basic | Enhanced Conversions + Data-Driven Attribution |
| Active text ads | N/A | 15+ well-performing ads |
Action Items for Agencies
Immediate (do now):
- Enable AI Max on all client Search campaigns
- Build comprehensive negative keyword lists BEFORE enabling (AI Max won't know what you don't want)
- Create more asset variations (headlines, descriptions) for AI to test
- Update Merchant Center product feeds with Q&A, accessories, substitutes
Short-term (Q1 2026):
- Apply for Direct Offers pilot (contact Google rep)
- Explore Business Agent for retail clients
- Ensure clients' Shopify/e-commerce stores are UCP-ready for Gemini/AI Mode checkout
Ongoing:
- Monitor search terms report for "AI Max" match type to understand what AI is finding
- Track overall CTR trends as AI Overviews expand
- Position this as "future-proofing" — clients' ads automatically appear in AI surfaces as they scale
Bottom Line
Google AI advertising is live and expanding rapidly:
- •AI Overviews: Ads appearing in 12 countries, alongside 40% of AI Overview SERPs
- •AI Mode: Direct Offers, Business Agent, and checkout launching Jan 2026
- •Gemini app: No ads, but checkout capability via UCP
- •Access: Enable AI Max in existing Google Ads — no separate platform needed
The agencies that master AI Max, prepare clients for Direct Offers, and optimize for AI citation will win as Google shifts from "10 blue links" to AI-first search.
