Google Expands Ads in AI Search Experiences: A Deep Dive into New Features and Challenges
At Google Marketing Live 2025, Google unveiled a host of new AI-powered advertising solutions, underscoring its focus on integrating generative AI with its core search and advertising businesses. This move comes less than a week after Google expanded its new search experience, known as AI Mode, to all users in the United States.
Ads Roll Out in AI Mode and AI Overviews
Google officially confirmed it will now show ads directly within AI Mode and extend ads to desktop users of AI Overviews, the AI-generated summaries that appear at the top of Google Search results. While some users had already noticed these ads, the company formally announced the rollout during the event, which took place right after its annual I/O developer conference, held by Google in Mountain View, California.
“Google internal data shows that people find ads within AI Overviews helpful because they connect them with relevant businesses, products, and services at the precise moment they’re needed,” the company said in a search document shared during the event.
The Push form Google for AI-Driven Advertising
The expansion of ads in these AI-driven search experiences is a strategic move for Google, given that search and advertising continue to be its primary revenue sources. In the first quarter of 2025 alone, Google reported $66.89 billion in ad revenue. As AI Mode becomes a bigger part of Google Search, it’s no surprise the company is looking to monetize it through ads.
Meanwhile, Google’s competitors—including Perplexity, OpenAI, and Microsoft—are also exploring or already testing ads in their AI-driven offerings. However, the growing role of AI in search has raised concerns among publishers and content creators, who fear it could divert traffic and undercut their ad revenue.
Facing Antitrust Challenges
This expansion of ads also comes as Google faces major antitrust challenges in the US. Recent verdicts have found Google guilty of monopolizing the online search and advertising markets. As a result, Google could potentially face a breakup of its search and advertising businesses—an outcome actively pursued by US regulators.
Where Will the Ads Be Placed?
In AI Mode, ads will appear “where relevant” below and integrated within AI-generated responses. AI Mode enables users to ask questions and receive comprehensive AI-generated answers, along with links for deeper exploration and the option to continue the conversation with follow-up queries.
This differs from AI Overviews, a feature that provides AI-generated summaries at the top of traditional Google search results. In AI Overviews, ads will appear when relevant to both the query and the generated summary, and will be clearly labelled as sponsored.
Google made some other key Announcements
Beyond search ads, Google also announced that its most advanced image and video generation models, Imagen 4 and Veo 3, will soon be available within Google Ads and Merchant Center. This will allow marketers to easily create campaigns and bring their creative ideas to life.
Google is also enhancing AI Max for Search campaigns with Smart Bidding Exploration, helping advertisers target high-performing search results. Additionally, new agentic AI capabilities will give advertisers more tools to optimize their campaigns.
-Arnav Krishna Dubey
