--- title: "Google Says AI Mode Earns Less From Ads, and Is Adding More" description: "Google told investors AI Mode's lower monetisation weighed on Search revenue, and is putting ads inside AI Mode answers in more countries, the UK next." tldr: "AI Mode, Google's conversational search tab, makes Google less from ads than traditional search: its chief business officer Philipp Schindler told investors on 28 October 2026 that AI Mode's growth weighed on Search revenue because of the 'lower monetization' Google sees there. In the same answer he said Google is scaling ads inside its AI answers: ads within AI Mode reached 10 more countries the same day, the UK, Brazil and Mexico follow by the end of 2026, and US ads now appear in follow-up answers too. Schindler also said many AI Mode queries are upper-funnel: research before a purchase decision. Record how your commercial queries look in AI Mode before the ads reach your market." publishDate: 2026-10-30 author: "Liam Hayward" --- AI Mode is Google's conversational search tab, where a Gemini-powered answer replaces the list of results and a citation link is the main route from the answer to a website. On Alphabet's third-quarter earnings call on 28 October 2026, Google said the "lower monetization" it sees in AI Mode had weighed on Search revenue, and in the same answer said it is scaling ads placed inside the AI answers themselves, to more queries and more countries. For a site that depends on organic clicks from commercial queries, that puts a paid placement in the same answer as the citations. ## What did Google say about AI Mode revenue? Philipp Schindler, Google's senior vice president and chief business officer, was asked by an analyst why Search revenue growth had slowed while query growth was the fastest in five years. Search and other advertising revenue rose 12% to $63.3 billion. Schindler named exchange rates as "the single largest driver" of the slowdown against the previous quarter, followed by advertiser spending in retail and media, then AI Mode: > "It's also worth noting that the strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode. To be clear, we feel very good about our trajectory here." Monetisation here means how much ad revenue Google makes from searches. Schindler did not say what makes it lower in AI Mode, whether fewer ads, cheaper ads or fewer clicks on them, and gave no figure. The remark concerned AI Mode. Schindler did not say AI Overviews, the AI summaries at the top of a standard results page, earn less. ## What are upper-funnel queries in AI Mode? Schindler described what people use AI Mode for in his prepared remarks, earlier in the call: > "On AI Mode, many of these queries are upper-funnel queries, allowing us to capture new high-value commercial intent." He added that "the majority of AI Mode queries are incremental", which he said would give Google more chances to earn from ads over time. Upper-funnel queries are the research that comes before a purchase decision: finding out what is available, comparing options and narrowing them to a shortlist. Incremental queries are searches that would not otherwise have happened. Pichai described the same queries as "longer, personalized and multimodal": AI Mode queries are on average three times longer than traditional searches, and one in five globally uses voice, images or documents. What shoppers report doing with AI tools in general, not AI Mode alone, fits that description. Semrush, which sells AI visibility tracking, surveyed 1,030 US shoppers who had tried AI tools in December 2025. 47% said they use AI to narrow down their options "but then turn to Google for reviews or pricing", 39% ask AI for recommendations and then shop on marketplaces such as Amazon, and 20% use AI throughout, from research to final decision. The split is not clean: half of the same respondents said they had used AI to make a final decision. ## Is Google scaling back AI Mode? Nothing on the call pointed that way. Sundar Pichai, CEO of Google and Alphabet, said the company's year-over-year query growth was "the highest it's been in the last 5 years" and credited its AI investments. He described the priority order directly: "Just like our shift to mobile over a decade ago, we are focused on building the best Search user experience, followed by monetization." Schindler said Google is "now scaling high-quality ads within AI Overviews and AI Mode to more users and queries", and described this as taking its ads in AI features global for the first time. ## Where do ads appear in AI Mode and AI Overviews? Two placements need separating, because they have reached different countries: - **Ads above or below an AI Overview** are available in every country and language where AI Overviews appear, according to Google Ads Help. - **Ads within an AI Overview or AI Mode answer** are English only. Google Ads Help lists the US, Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan (text ads only), the Philippines and Singapore, plus Indonesia for AI Overviews only. All of those except the US and Indonesia were added on 28 October. In a post the same day, Shashi Thakur, Google's vice president and general manager for Search Ads and Ads on Google Experiences, wrote: "In Q4 2026, we plan to expand to additional locales, including Brazil, Mexico, and the United Kingdom." Ads in AI Mode first launched in the US in May 2025. The same post launched multiturn ads in the US: "To allow ads in follow-up queries in AI Mode, we are launching multiturn ads in the U.S." A Google spokesperson told Search Engine Roundtable that they "show up on responses to follow-up user queries as users engage in back and forth conversations with AI Mode." Until now, a follow-up question in an AI Mode conversation could be answered without an ad. Every placement is labelled "Sponsored", and Google Ads Help states that paid ads do not influence the organic AI response. ## What do AI Mode ads mean for organic visibility? On a commercial query, an AI Mode answer can now carry a sponsored placement alongside the sources it cites, and in the US that applies to every follow-up answer in the conversation, where a shortlist gets refined, not only the first. Google's post gave one figure on how the two compete: "click-through rates are already similar between sponsored and organic product list items within AI Mode", from Google's internal data for 20 August to 3 September 2026. Google published no figure for text ads against organic citations, and Google Ads Help says ad layouts are still being tested and can change. Search Console will not show the change directly. Its generative AI report gives AI Mode impressions but no clicks or queries, and ads appear in neither. If you work on a UK, Brazilian or Mexican site, record now how your main commercial queries look in AI Mode: which sources it cites and which product listings it shows. When ads arrive, that record is what tells a lost click to a new sponsored placement apart from a lost citation. On Google's description, AI Mode's growth is in the research phase: comparison and shortlist queries, where a citation is how a brand gets onto the list. The purchase step that follows is a search for the brand or the exact model, which is where the Semrush respondents said they turn to Google for reviews or pricing, and where your product pages, retailer listings and reviews compete. Search Console reports no AI Mode clicks, so the branded and product-name queries that follow a shortlist are the part of that journey you can see in your own data. ## Sources - [Alphabet Q3 2026 earnings call transcript, The Motley Fool](https://www.fool.com/earnings/call-transcripts/2026/10/29/alphabet-googl-q3-2026-earnings-call-transcript/) - [Ads in AI Mode are going global, Google Ads & Commerce Blog](https://blog.google/products/ads-commerce/ads-in-ai-mode-global/) - [About ads in AI Overviews and AI Mode, Google Ads Help](https://support.google.com/google-ads/answer/18826097) - [Google Expands Ads In AI Mode In More Countries & Multiturn Ads In U.S., Search Engine Roundtable](https://www.seroundtable.com/google-expands-ads-ai-mode-42412.html) - [Google: Ads In AI Mode Earning Less Than Traditional Search Ads, Search Engine Roundtable](https://www.seroundtable.com/google-ai-mode-ads-earn-less-42417.html) - [How AI Tools Influence the Modern Buyer Journey, Semrush](https://www.semrush.com/blog/ai-tools-the-modern-buyer-journey-study/)