Google Tests Ads in AI-Powered Search Results, Unveils New AI Tools for Businesses

Google is venturing into a new frontier of search advertising with the introduction of ads within its AI-powered search experience, "AI Overviews." This move signifies the company's efforts to monetize its advancements in generative AI while transforming its flagship search product.

AI Overviews Get Ads: A New Revenue Stream for Google

Following the recent US rollout of AI Overviews, Google announced plans to test search and shopping ads within these summaries. These AI-generated summaries combine information from various web sources to provide users with comprehensive answers to their queries.

Ads will be clearly labeled as "sponsored" and will appear only when they are relevant to both the user's search query and the information presented in the AI Overview. Google assures advertisers that no additional action is required on their part, as ads will be automatically pulled from existing Search, Performance Max, and Standard Shopping campaigns.

This initiative aligns with Google's broader strategy, as Alphabet's chief business officer, Philipp Schindler, previously mentioned exploring ad formats within the Search Generative Experience (SGE). Early testing results indicate positive user reception towards ads displayed above and below AI-generated summaries.

A Glimpse into How Ads Might Appear

Google provided an example of how users might encounter ads within AI Overviews. In a search for "how do I get wrinkles out of clothes?", an AI-generated response would be presented, followed by a separate "Sponsored" section showcasing a carousel of ads for wrinkle-removal products.

The company plans to introduce new ad formats in the future and actively seek feedback from advertisers and the industry to optimize this new advertising avenue.

Beyond AI Overviews: A New AI-powered Ad Experience for Complex Purchases

Google is also piloting a new AI-powered ad experience designed to guide users through intricate purchase decisions. For instance, searching for "short-term storage" might trigger an ad for a storage facility that leads to a dynamic experience. Here, AI can assist users in determining their specific storage needs. By sharing details like furniture photos and budget, the user can receive recommendations on storage unit size, packing materials, and even links for online purchase.

These advancements aim to solidify Google's dominance in search advertising, a significant revenue generator for the company. Google's Search and other revenues segment raked in a staggering $46.2 billion in Q1 2024, reflecting a 14% year-on-year growth.

AI for Advertisers: Enhanced Creativity and Personalization Tools

Sundar Pichai, CEO of Google's parent company Alphabet, previously emphasized advertising as a cornerstone for monetizing AI technologies and products. This vision translates into a range of new tools and features for advertisers.

Performance Max Enhancements:

• Font and Color Control: Advertisers will soon have the ability to define font and color guidelines within Performance Max campaigns, ensuring brand consistency across generated creative assets.

• Image Reference Points and Variations: Performance Max will allow advertisers to provide image reference points, enabling the generation of new variations of their marketing materials.

• Advanced Image Editing: New image editing capabilities empower advertisers to modify existing images by adding objects, extending backgrounds, or cropping them to fit different formats, sizes, and orientations. Retailers can leverage these editing tools for their products hosted on Google Merchant Center feeds.

Reaching New Audiences with Demand Gen Campaigns:

• Visually Appealing Multi-format Ads: Demand Gen campaigns, designed to generate interest in a product or service, will now enable advertisers to create visually-rich, multi-format ads across Google properties like YouTube, Gmail, and Discover.

• New Formats for YouTube Shorts: To engage viewers on YouTube Shorts, Google is introducing new ad formats, including vertical video ads, action-oriented ad stickers, and automatically generated animated image ads based on existing assets.

Generative AI Empowers Retailers

In addition to advertising advancements, Google announced new tools leveraging generative AI to empower retailers. These tools focus on creating high-quality product imagery that aligns with brand identity, along with three immersive ad formats.

• Enhanced Shopping Ads: Retailers can enhance their shopping ads with immersive features like virtual try-on capabilities and 3D product ads. Shoppers can also delve deeper within the ad to explore product videos, summaries, and similar product recommendations provided by the advertiser.

• Product Studio Expansion: Product Studio, a tool that utilizes generative AI to create unique product images, is expanding its reach to India and Japan in the coming weeks. This tool is currently available in the US, UK, Australia, and Canada.