Google says people click AI-answer ads about as often as regular listings
Google says people find the ads relevant, even as its search business missed revenue expectations by about $2 billion.
WSJ What's News · ‘AI Mode’ Is Denting Google’s Search RevenueGoogle says people click paid ads inside its AI answers at about the same rate as regular product listings.
That claim comes from Philip Schindler, Google's chief business officer. AI Mode is the option in Google search that writes a direct answer instead of just showing a list of links. Schindler said user research shows people are comfortable seeing ads there and find them highly relevant, with similar click rates for sponsored and unpaid product listings.
He also said the majority of AI Mode searches are extra searches on top of regular ones, creating more chances to show ads over time. Right now, though, AI Mode makes less money per search than traditional search.
Investors were not reassured, and Alphabet shares fell around 10 percent in off-hours trading. Google's search business brought in about $2 billion less than the $98.5 billion analysts had expected.
Questions people ask
What is Google's AI Mode?
It is a search setting that uses artificial intelligence to write a conversational answer at the top of the results page, often with links and product listings underneath. Google has been expanding it as more users ask longer, chat-style questions. Ads can appear alongside or inside those AI answers.
How does Google normally make money from search?
Mostly from advertisers who bid to appear next to results when you search for something you might buy, like running shoes or flights. Google gets paid when you click one of those sponsored links. That search-ad business remains the largest part of parent company Alphabet's revenue.
If click rates are equal, why is AI Mode less profitable?
Equal click rates do not mean equal dollars. AI answers can change how many ads fit on a page, what advertisers will pay for them, and how often a search leads to a purchase. Google itself says AI Mode is currently less monetized, while arguing that extra queries will make up for it over time.