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Google says AI Mode ads earn less than classic search
Alphabet’s ad chief put part of the search slowdown down to AI Mode, while Google trials Shopping ads inside its product carousels there.
Yesterday we reported that Google is taking ads in AI Mode, its chat-style search, to ten more countries. On the same 28 October 2026 earnings call, Philipp Schindler, Google’s chief business officer, gave the other side of that push: the fast rise in AI Mode questions weighed on revenue because of “the lower monetization we were seeing in AI Mode”, Search Engine Roundtable reports. So an AI Mode question currently brings Google less ad money than a classic search. Schindler named currency swings as the biggest cause of the search slowdown since the second quarter.
Search revenue grew 12 per cent to $63.4 billion in the third quarter, against 15 per cent a year earlier, Marketing Dive notes. One of those experiments is now visible: a Google spokesperson confirmed to Search Engine Roundtable that, in an experiment, paid Shopping listings can sit among the unpaid products in AI Mode carousels for commercially relevant searches, with a sponsored label on each paid one. A day later Reddit’s chief executive, Steve Huffman, told his own investors that Google referrals to Reddit fell by more than a million a week on average in October, and blamed AI Mode and AI Overviews in part, The Verge reports.
Our guide to AI ad disclosure rules, updated 25 October 2026, records Google’s AI label policy of 9 July 2026. The label setting is optional. A visible overlay appears only in campaigns that target the EU, India or New York; elsewhere a labelled ad carries a note in its three-dot menu.
So under that policy, a Shopping ad with an AI-made product image in one of those carousels, outside EU, India or New York targeting, shows the shopper only the sponsored tag, which marks the listing as paid, while any AI note sits in the three-dot menu.
Earlier on this story: Google takes ads in AI Mode to 10 more countries
Sources
- Search Engine Roundtable: Google: Ads In AI Mode Earning Less Than Traditional Search Ads. Checked
- Marketing Dive: Google’s AI overhaul of search hits snags as ad revenue growth cools. Checked
- Search Engine Roundtable: Google AI Mode Tests Blending All Products With Sponsored Products. Checked
- The Verge: Reddit’s CEO says Google’s AI Mode ‘does not drive traffic’. Checked
Alexandre S.
Alexandre S. is a creative ad strategist and copywriter with ten years' experience in digital marketing across multiple channels.