Google has initiated public testing of several new artificial intelligence (AI)-driven ad formats within its traditional search results and its "AI Mode," as the company seeks to convert generative AI traffic into sustainable advertising revenue, according to a report.
Google's New AI Advertisement Formats: How They Work
The new ad formats are designed to integrate naturally alongside AI-generated content. Google's primary updates include:
- Conversational discovery: This format employs Google's Gemini models to create custom advertisements in real time. The AI pulls text, imagery, and product details directly from a brand's website and marketing assets to match the specific context of a user's query.
- Highlighted answers: In this type, highly specific product explanations generated by Gemini are featured, using a company's internal documentation to directly answer user questions.
- Direct offers: These ads display targeted discount codes and promotions. Initially introduced exclusively within AI Mode, Google is now expanding Direct Offers to standard search results.
- Business agent for leads: Testing natively within traditional search results, this tool embeds a miniature AI chatbot directly inside a standard advertisement, allowing users to ask questions about a product or business without leaving the search page.
According to a Google spokesperson, regardless of how integrated the copy appears, every new format will be clearly labeled with the word "Sponsored."
The Next Step: Bringing Ads to Gemini
For now, these advertisements will remain restricted to Google Search and AI Mode; they will not appear inside the standalone Gemini consumer app. However, industry analysts view this public test as a clear pilot program for a broader rollout. Google Chief Business Officer Philipp Schindler stated during the company's recent earnings call that while the current focus remains on AI Mode, Google believes successful formats will eventually transfer to the standalone Gemini app.
This development comes as the digital ad landscape shifts rapidly. Researchers predict that Meta Platforms, the parent company of Instagram and Facebook, could soon overtake Google as the world's largest digital advertising seller, largely due to its automated campaign tools. Meanwhile, OpenAI has been testing ads inside ChatGPT since February.
"In a world where AI provides a direct and conversational response, will users still find value in ads? Our answer is, it's definitely yes, but you have to rethink how to approach ads and what an ad is," The Wall Street Journal quoted Shashi Thakur, vice president and general manager of Google search ads, as saying.
