Google Expands AI Search Ads Globally as Advertising Growth Slows

TL;DR

• Google is expanding advertising in AI Mode to international markets and introducing multi-turn ads in the U.S.
• Alphabet reported third-quarter revenue of $127.6 billion, up 25% year over year.
• Search revenue growth slowed to 12%, compared with 17% in the second quarter and 19% in the first.
• Google says sponsored product listings in AI Mode are achieving click-through rates comparable to organic listings.

Google Takes AI Mode Advertising Into International Markets

Google is expanding ads across its AI-powered Search experiences internationally as it seeks new revenue opportunities amid slowing growth in its core search advertising business.

The company announced the expansion during Alphabet’s third-quarter earnings call on Wednesday. Alongside the international rollout, Google is introducing multi-turn advertising in AI Mode in the United States.

“We are now scaling high-quality ads within AI overviews in AI mode to more users and queries,” Google Chief Business Officer Philipp Schindler told investors.

“This includes taking our monetization footprint global for the first time.”

Google did not identify the international markets covered by the expansion in the supplied announcement.

Search Growth Slows Despite Stronger Alphabet Revenue

Alphabet generated $127.6 billion in third-quarter revenue, an increase of 25% from a year earlier.

However, Google Search revenue grew 12%, slowing from 17% in the second quarter and 19% in the first. The deceleration increases pressure on Google to convert rising use of its AI features into advertising revenue.

Alphabet shares fell 8% following the results.

Google Services, the division that includes Search, reported revenue of $96.3 billion, up 11% year over year. Google Cloud grew substantially faster, with revenue rising 103% to $30.7 billion.

Google Reports Encouraging Early Ad Performance

Schindler said sponsored product listings in AI Mode already generate click-through rates comparable to organic listings. Google’s user research also suggests people consider the ads relevant, he added.

Those findings offer an early indication of engagement, although the company did not disclose how much revenue the formats generate.

The expansion builds on Gemini-powered advertising formats announced in May. Those included conversational discovery ads that respond to questions and sponsored recommendations incorporated into AI-generated answers.

The broader objective is to make advertising work within increasingly conversational search sessions.

AI Changes How People Search

Google CEO Sundar Pichai said Search queries recorded their fastest year-over-year growth in five years, although he did not provide a specific growth rate.

He attributed the increase partly to AI features encouraging longer and more complex searches.

Queries in AI Mode are three times longer on average than traditional searches, according to Pichai. Globally, one in five AI Mode searches includes voice, images or documents, while Google now handles more than 50 billion visual searches each month.

“People are using our AI features more, searching in entirely new ways,” Pichai said. “Their queries are longer, personalized, and multimodal.”

Expansion Follows a Busy Quarter for Google AI

The advertising rollout follows several major product developments, including the release of Gemini 4 Argon and the launch of the Pixel 11 lineup.

Google’s Gemini app has also reached one billion monthly users, expanding the company’s audience for AI services.

For its Search business, the challenge is translating changing user behavior and growing AI engagement into sustained revenue growth as conventional search advertising loses momentum.