🔍 Read the full analysis: The Business Of AI Search: Google Brings Ads To More Markets on ThorstenMeyerAI.com
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TL;DR
Google said on October 28 that ads in its AI Mode search will expand to 10 more countries, with ads also appearing in US follow-up questions. Alphabet reported Google Search and other revenue grew 12% in the third quarter, down from 17% in the prior quarter; the company cited foreign exchange and lower monetization of AI Mode searches among the factors.
Google said on October 28 it is expanding ads in its conversational AI search feature, AI Mode, to 10 additional countries and introducing ads in US follow-up questions. The move comes as Alphabet reported that Google Search and other revenue grew 12% in the third quarter, slower than the 17% growth recorded in the previous quarter.
The new AI Mode markets are Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines and Singapore. Google said Brazil, Mexico and the United Kingdom are planned for the fourth quarter of 2026. In the United States, ads can now also appear in responses to later questions in an AI Mode conversation, not only in response to the initial query.
Google’s October 28 announcement, by Shashi Thakur, who leads its search ads business, describes ads appearing alongside AI-generated answers. The company’s example is a person asking how to fix a green swimming pool and receiving an answer that includes a relevant pool vacuum ad. Google says the ads will be labeled “Sponsored” and that ads do not affect the AI-generated answer. That separation is Google’s stated policy; the source material does not identify an independent audit of it.
Google says existing Search, Shopping and Performance Max campaigns can serve in the new placements automatically. According to Google Ads Help, advertisers do not have a separate targeting control or an opt-out for these placements, and reporting is provided in aggregate. Google’s AI may also produce short explanatory text alongside ads, which advertisers cannot edit, according to the help material cited by ThorstenMeyerAI.com.
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.
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Ads Follow Users Into AI Search
The expansion gives Google more opportunities to earn advertising revenue from searches that take place inside AI-generated answers and multi-question conversations. It also changes where ads appear: a user may see a commercial placement within an answer flow rather than only among conventional search results. That makes the distinction between advertising and answer content a central issue for users and advertisers.
The revenue figures add a business reason to watch the rollout, but they do not establish that the new placements will reverse slower growth. Alphabet reported $63.4 billion in Google Search and other revenue for July through September, up 12% year over year. Chief business officer Philipp Schindler named exchange rates as the biggest factor affecting growth and also said the lower monetization of fast-growing AI Mode searches had an impact. Google has not disclosed in the supplied material how much revenue the new ads are expected to generate.
Publishers also have a direct interest because search referrals can bring readers to their websites. A working paper by Agarwal and Sen, cited by ThorstenMeyerAI.com, reports a randomized experiment involving 1,065 US users: when AI Overviews appeared, clicks to websites fell by 39.8%, while clicks on ads showed no measurable change. That result concerns the study’s particular experiment; it is not a universal estimate of the effect on publishers or evidence that the same pattern will occur in AI Mode.
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From AI Overviews to AI Mode
Google’s AI search products include AI Overviews, summaries that can appear above standard search results, and AI Mode, a separate, chat-style search experience that accepts longer questions and follow-ups. Ads in AI Overviews first appeared for US mobile users in October 2024, according to Google’s published timeline. Google brought them to desktop in May 2025 and began testing ads in AI Mode at the same time.
At Google Marketing Live in May 2026, the company began testing additional ad formats, including Conversational Discovery ads, which use Gemini to tailor ad text to a question, and Highlighted Answers, where an ad can appear within an AI recommendation list. The October announcement extends AI Mode ads geographically and adds them to US follow-up queries. Google says AI Mode queries are, on average, three times longer than traditional searches. It also reported similar click-through rates for sponsored and organic product-list items in AI Mode, based on its own US data from August 20 to September 3, 2026. That comparison is limited to product-list items and does not measure clicks to publisher websites.
In the third quarter, Search and other revenue represented about half of Alphabet’s reported revenue, according to the company’s earnings release. Its year-over-year growth rate was 12%, compared with 17% in the second quarter. Schindler also cited spending patterns among some retail advertisers in Asia and normalized media and entertainment spending after a strong World Cup quarter. The company’s explanation includes several factors, so the slowdown cannot be attributed to AI Mode alone.
“The strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode.”
— Philipp Schindler, Alphabet chief business officer, on the earnings call
Controls, Results and Reach
The available information does not quantify the revenue Google expects from the expansion or show how ads will affect overall advertiser returns. Google’s claim that ads do not influence AI answers has not been independently audited in the material provided. Nor does Google’s cited comparison of ad and organic product-list click-through rates establish whether users click fewer links to publishers when AI answers appear.
Advertisers’ ability to control these placements appears limited: the cited Google Ads Help information says campaigns participate automatically, there is no separate opt-out or targeting, and reporting is aggregated. The source material also says Google’s help page listed 12 countries for ads inside AI answers, in English, as of October 29, 2026; it did not list Germany or other EU markets. Whether and when Google will expand to those markets is not specified.
Markets and Metrics to Watch
Google has said it plans to add Brazil, Mexico and the UK in the fourth quarter of 2026. The company’s next steps will show how quickly the AI Mode ad rollout reaches those markets and whether it expands further. For advertisers, relevant details to watch include how Google reports performance for these placements and whether it introduces more campaign controls.
Alphabet’s future earnings reports may offer further evidence about Search revenue growth and AI Mode monetization, though the company has not announced a separate revenue target for these ads. Users and publishers will also be watching whether the Sponsored label remains clear in conversational answers and how traffic to outside websites changes as more searches take place within Google’s AI features.
Key Questions
Where is Google expanding ads in AI Mode?
Google named Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines and Singapore. It said Brazil, Mexico and the UK are planned for the fourth quarter of 2026.
What is new for US users?
Ads can now appear in follow-up questions in AI Mode, so an ad may be shown later in a conversation as well as after an initial query.
Can advertisers opt out of these placements?
According to the Google Ads Help information cited in the source, existing Search, Shopping and Performance Max campaigns can participate automatically, with no separate opt-out or targeting control. Performance reporting is provided in aggregate.
How does Google say users can recognize an ad?
Google says ads in AI answers will carry a “Sponsored” label. Its claim that ads do not influence AI-generated answers has not been independently audited in the source material.
Are ads in AI answers available in Europe?
The source says Google’s help page listed 12 countries for ads inside AI answers as of October 29, 2026, and did not include Germany or other EU markets. Google has not specified a rollout date for those markets in the information provided.
Source: ThorstenMeyerAI.com
