🔍 Read the full analysis: Google Expands Advertising In AI Search As Growth Slows on ThorstenMeyerAI.com
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TL;DR
Google said on October 28 that ads in AI Mode are expanding to 10 more countries and that US users will see ads in follow-up questions. The announcement came as Alphabet reported Google Search & other revenue growth of 12% in the third quarter, down from 17% in the prior quarter. Google says ads will be labeled “Sponsored”; questions remain about their effect on website traffic and how independently the separation between ads and AI answers can be verified.
Google is expanding ads in AI Mode to 10 more countries and adding ads to US follow-up questions, the company said October 28, as its parent, Alphabet, reported that Search & other revenue grew 12% in the third quarter, down from 17% in the previous quarter. The changes extend advertising into more conversational AI search results at a time when Google says those searches are growing but generate less revenue per query.
The new 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 appear in answers to follow-up questions in AI Mode, rather than being limited to the initial query. AI Mode is Google’s chat-style search experience; AI Overviews are generated summaries that appear within standard search results.
Google says ads in AI answers will carry a “Sponsored” label and that advertising will not influence the AI-generated answer itself. The company has not offered an independent audit of that separation in the supplied material. The expansion concerns existing advertising products: according to Google Ads Help, Search, Shopping and Performance Max campaigns participate automatically, with no separate opt-out or dedicated targeting option. Reporting is provided in aggregate, and Google-generated explanatory text beside ads cannot be edited by advertisers.
Alphabet reported $63.4 billion in Search & other revenue for July through September, about half of the company’s total revenue. The 12% year-over-year growth rate followed 17% in the previous quarter and 19% in the first quarter of 2026. On Alphabet’s earnings call, chief business officer Philipp Schindler cited currency effects as the largest factor in the slowdown, while also saying growth in AI Mode queries affected results because those searches had “lower monetization.”
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 Search Into AI Chats
Google’s move puts advertising into more stages of a search conversation. When a user asks a question, then asks for comparisons or recommendations, an ad may now appear in a follow-up answer in the US. For advertisers, that creates new placements without a separate campaign setting. For users, the distinction between a generated answer and a paid placement depends in part on noticing the Sponsored label.
The change also matters to publishers that rely on search referrals. If AI answers satisfy users without sending them to websites, publishers could lose visits even while ads remain visible in search. A 2026 working paper by Agarwal and Sen, based on a randomized experiment with 1,065 US users, reported that AI Overviews reduced website clicks by 39.8% when they appeared, while clicks on ads showed no measurable change. That result is limited to the study’s experimental setting; it does not establish the effect of this latest AI Mode expansion across markets or search traffic overall.
The financial backdrop is relevant but not proof that the expansion was prompted by slowing growth. Alphabet’s reported figures show Search & other revenue increased by 12% year over year in the third quarter, compared with 17% in the second. Schindler also pointed to lower monetization in AI Mode. Google is extending ads in that format while it develops ways to earn revenue from a growing type of search.
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How Google Added Ads to AI Search
Google’s AI search advertising has expanded in stages. Ads in AI Overviews began appearing for US mobile users in October 2024, according to Google’s published timeline. In May 2025, Google brought them to desktop and began testing ads in AI Mode. At its May 2026 Google Marketing Live event, the company introduced tests of formats including Conversational Discovery ads, which adapt ad text to a question, and Highlighted Answers, which can place an ad within a list of AI recommendations.
The October announcement adds more countries to AI Mode ad availability and introduces US advertising in follow-up queries. Google says AI Mode queries are, on average, three times longer than conventional searches. It also reported that click-through rates were “already similar” for sponsored and organic product-list items inside AI Mode. That comparison came from Google’s internal US data for August 20 to September 3, 2026; it compares paid and unpaid product listings within AI Mode, not clicks through to outside websites.
Alphabet’s reported Search & other growth rates were 17% in the fourth quarter of 2025, 19% in the first quarter of 2026, 17% in the second quarter and 12% in the third. The company also cited currency movements, changes in some retail advertising and the normalization of media and entertainment spending after a strong World Cup quarter. Those factors provide important context: the slowdown was not 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
What Traffic and Labels Will Show
It is not yet clear how much the new placements will change advertiser performance, publisher referrals or Google’s revenue from AI Mode. Google’s internal comparison concerns clicks on sponsored versus organic product listings, not whether users click through to publisher websites. The working paper on AI Overviews measures a different format and cannot, on its own, predict the effect of ads in AI Mode follow-up answers.
Google says ads do not affect the AI’s own answer, but the supplied material identifies no independent audit of that claim. The company has not detailed whether additional controls or reporting options will be offered to advertisers as the expansion proceeds. Its help-page list covers 12 countries for ads in AI answers, in English; Germany and other EU countries are not listed as of October 29, 2026. That does not establish when or whether service will reach those markets.
The relationship between the revenue slowdown and the rollout also remains uncertain. Alphabet attributed the quarter’s results to several factors, including exchange rates and advertising-market changes, as well as lower monetization for AI Mode searches. The figures do not show how much each factor contributed, and they do not establish that slower growth caused the expansion.
Markets and Metrics to Watch
Google’s stated next geographic step is expansion to Brazil, Mexico and the United Kingdom in the fourth quarter of 2026. The company has also begun showing ads in US follow-up queries. Advertisers, publishers and users can watch for further details on rollout timing, ad labeling, campaign reporting and whether Google provides more granular performance data.
Alphabet’s next earnings results should show whether Search & other revenue growth changes and whether company executives give further detail on AI Mode’s monetization. Future traffic studies may also clarify whether evidence about AI Overviews applies to conversational search, though results will depend on the study design and markets measured. For now, Google’s expansion and its third-quarter figures are confirmed; the longer-term effects on referrals, ad returns and user trust remain to be measured.
Key Questions
Where is Google expanding ads in AI Mode?
Google said ads are expanding 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.
What changes for users in the United States?
Ads can now appear in follow-up questions in AI Mode, not only in response to the initial query. Google says each ad will be marked “Sponsored.”
Can advertisers opt out of AI Mode ads?
According to Google Ads Help, existing Search, Shopping and Performance Max campaigns participate automatically. The supplied information says there is no separate opt-out or dedicated targeting option; reporting is aggregated.
Did Google say AI Mode ads caused the revenue slowdown?
No. Alphabet reported Search & other revenue growth of 12% year over year in the third quarter, down from 17% in the previous quarter. Philipp Schindler cited currency effects as the largest driver and said lower monetization of AI Mode searches also affected results, alongside other factors.
Are ads in AI answers available in Germany?
Germany and other EU countries are not on Google’s listed country roster for ads in AI answers as of October 29, 2026. The supplied information does not say when those markets may be added.
Source: ThorstenMeyerAI.com
