Google Expands AI Search Ads Globally Amid Slowing Core Ad Growth
Google is rolling out ads in its AI-powered Search experiences worldwide, seeking new revenue streams as its core search advertising business growth slows. This expansion may help offset declining ad growth.
Original reporting · techcrunch.com
Original: “Google expands AI Search ads globally as core ad growth slows”
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Key points from TechCrunch’s report
- Google is expanding its AI-powered Search ads globally to offset slowing core ad growth.
- The company's AI features are changing the way people use Search, with longer and more complex queries.
- Google's early results from AI-powered Search ads show promising click-through rates and user engagement.
- The expansion builds on Google's previous announcement of new Gemini-powered ad formats.
- The company's revenue growth is driven by its Google Services division and surging Google Cloud revenue.
Google is betting on its AI-powered Search features to generate new revenue opportunities. The company's core search advertising business has been experiencing a slowdown in growth. As a result, Google is looking to its AI features to help drive revenue.
The announcement was made during Alphabet's third-quarter earnings call, which reported a significant increase in revenue. However, the growth of Google's Search advertising business has been decelerating. This slowdown has put pressure on the company to find new sources of revenue.
According to Google's chief business officer, the company is now scaling its high-quality ads within AI overviews to more users and queries. This expansion includes taking its monetization footprint global for the first time. The move is expected to help Google tap into new revenue streams.
Google says that early results from its AI-powered Search ads are promising. The company has seen comparable click-through rates for sponsored product listings in AI Mode to those for organic listings. This suggests that users find the ads relevant and useful.
The expansion of AI-powered Search ads builds on Google's previous announcement of new Gemini-powered ad formats. These formats include conversational discovery ads and sponsored recommendations integrated into AI-generated answers. The company is hoping to capitalize on the growing use of AI features in Search.
Google's CEO noted that Search queries have been growing at a rapid pace, with users asking longer and more complex questions. The use of AI features has changed the way people interact with Search, with many users now using voice, images, or documents to search. This shift in user behavior may create new opportunities for advertisers.
The company's results show that its Google Services division, which includes Search, generated significant revenue. Google Cloud revenue also surged, driven by growing demand for cloud services. The expansion of AI-powered Search ads is expected to contribute to the company's revenue growth in the future. This article is based on reporting by TechCrunch.
Questions and answers
What is Google's goal with expanding AI-powered Search ads?
Google aims to generate new revenue opportunities and offset slowing core ad growth.
How are users interacting with Google's AI-powered Search features?
Users are asking longer and more complex questions, and using voice, images, or documents to search.
What are the early results from Google's AI-powered Search ads?
The company has seen comparable click-through rates for sponsored product listings in AI Mode to those for organic listings, indicating that users find the ads relevant.
