What Google’s AI Mode Means for Paid Search

Google is making a significant move towards AI-driven search with the expansion of ads in its new AI Mode. For advertisers, this represents a fundamental shift in how paid search works.

With over 100 million users already engaging with AI Mode, Google is now briefing brands and agencies on how ads will function in this new environment. Here’s what you need to know, and how to prepare.

From keywords to conversations

Until now, paid search has been built around keywords. AI Mode changes that.

Instead of targeting single queries, ads will be based on the full context of a user’s conversation with the AI. This means a broader understanding of intent, which can’t be matched by traditional keyword targeting alone.

Google is still showing text and product-based ads, but the difference lies in how those ads are selected and placed. Campaigns like Performance Max and AI Max for Search will be eligible automatically, and advertisers are being encouraged to keep their product feeds in top shape.

As our Head of Paid Media, Steve Harris, puts it:

“Google has already started briefing brands on AI Ads, which are set to roll out in Q4. These ads will be based on conversation-level context rather than keywords, so PPCers will need to pivot to appear in these results.”

In short, campaign structure and optimisation strategies will need to adapt quickly.

What about ad-free experiences?

As more platforms offer ad-free subscriptions, some are asking whether this is the direction paid media is heading.

Meta now offers an ad-free option in the EU for Facebook and Instagram, starting from £5 a month. Amazon Prime offers a similar upgrade, and YouTube Premium has been available for years. But uptake has been limited.

Joaquin Lopez-Otero, Paid Media Manager at Koozai, shares his view: “I doubt many people will pay Meta to not see ads. Looking at current data for other platforms, paying for ad-free services isn’t as popular as expected. Only 5% of YouTube users have Premium, and around 20% of Amazon Prime users pay for the ad-free option. I’d expect it’ll be even less for Meta, as users just don’t get enough out of it to justify the cost. This feature was tested in the EU at €9.99 and had to be reduced to €5.99 due to it’s unpopularity.”

It’s unlikely that ad-free subscriptions will replace ad-funded models any time soon. The data just doesn’t support it.

Will Google change its revenue model?

It’s worth remembering that paid search still accounts for the majority of Google’s revenue. While AI Mode represents a shift in how users interact with search, it’s unlikely that Google will take any risks with its advertising business.

Here’s how Joaquin sees it: “Even with the rollout of AI Mode, I doubt Google would want to impact their main revenue stream, which is Google Ads. They’ll most likely have a new algorithm created to support AI while keeping ad performance strong. We already have AI Max available on Google search campaigns for this reason.”

So while the format and targeting are changing, the core principles of paid search remain. Visibility. Relevance. Intent. Performance.

Our thoughts

Steve:

• “AI Mode will predominantly satisfy informational based searches and it’s unclear if there’s a place for bottom of the funnel, product based searches on AI Mode.”
• “My expectation is that AI Mode satisfies top of the funnel searches and will be an important part of awareness based activity.”

Joaquin:

• “This is a huge shift in how people navigate through the consumer process. AI Mode will make it easier for people to access information in a quicker way. This might even speed up top and middle funnel activity leading to a shorter conversion window.

What should advertisers do now?

This isn’t the time to pause and wait. It’s time to prepare. Here’s where to start:

1. Review your campaign types

Make sure you’re using Performance Max or AI Max for Search, which are already set up for AI Mode placements. Make sure to test them in separate campaigns rather than making the full switch. With anything new on Paid Media, always test before switching everything over.

2. Prioritise product data quality

AI placements rely heavily on your product feed. Clean, accurate and detailed data will give your ads the best chance of appearing in relevant results.

3. Adjust your strategy for context

Move beyond keyword obsession. Focus on messaging and targeting that works at a conversation level. We’re moving into a new world where context matters and information needs to be relevant from the beginning.

4. Stay alert to new metrics

AI Mode may shift how performance is measured. Impressions, engagement and visibility could become more important than click-through rates in some cases.

And most importantly, stay flexible.

As Joaquin puts it: “We’ll do what marketers do and just adapt, like chameleons.”

Google’s introduction of ads in AI Mode is a clear sign of where search is heading. It brings challenges, but also opportunities for those who prepare early and adjust their approach.

Ad-free models might grab headlines, but for now, the majority of digital experiences will remain funded by advertising. The key is to understand how these new formats work and align your strategy accordingly.

If you’d like support preparing for AI-powered search or want to make sure your campaigns are ready for Q4, get in touch. We’re already helping clients stay ahead of these changes.

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