Google Scales AI Mode Ads to 10 Countries as Search Growth Slows

Google used Alphabet's third-quarter earnings call to confirm that ads inside AI Mode are rolling out to Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines and Singapore, with Brazil, Mexico and the UK to follow in Q4. In the US, the company is launching 'multiturn ads,' which drop sponsored placements into follow-up queries during an ongoing AI Mode conversation, as TechCrunch reported.

The commercial pressure is in the numbers. Google Search ad revenue grew 12% year over year in Q3, down from 17% in Q2 and 19% in Q1. Chief business officer Philipp Schindler told analysts that 'Strong AI mode query growth negatively impacted search revenue growth due to lower monetization in AI Mode.'

CEO Sundar Pichai framed it as a sequencing issue, not a product issue. 'Just like our shift to mobile over a decade ago, we are focused on building the best Search user experience, followed by monetization,' he said. Pichai added that year-over-year query growth is the highest it has been in five years, and that AI Mode queries run, on average, three times longer than traditional searches.

Schindler's pitch to the ad side was blunter: 'We are now scaling high-quality ads within AI overviews in AI mode to more users and queries.' Google's claim is that click-through rates for sponsored product listings in AI Mode are already comparable to organic listings. The company did not disclose AI Mode revenue or quantify its drag on the Search line.

Alphabet reported $127.6 billion in Q3 revenue, up 25% year over year; our earnings coverage walked through the rest, and it is the third Google story on our tracker this week.