Google expands ads in its AI search mode worldwide
In brief
- Google is expanding ads in its AI search mode globally after successful US tests.
- Search revenue growth slowed to 12 % in Q3 (63.25 billion dollars), down from 17 % in Q2.
- AI infrastructure investments reached 51.4 billion dollars in Q3, impacting profitability.
Google is rolling out ads in its AI search mode globally, following limited tests in the United States. This mode, launched in France this summer, competes with conversational assistants like ChatGPT. According to Alphabet’s third-quarter results, search revenue (primarily ads) grew by 12 % to $63.25 billion, but growth is slowing (17 % in Q2, 19 % in Q1).
Google’s commercial director, Philipp Schindler, attributes this slowdown to weaker monetization in the AI mode. US tests show users click as much on sponsored product listings as on organic ones, and the AI mode generates new high-value purchase intentions early in the customer journey. The company plans to invest $205 billion in capex for the fiscal year, including an additional $73.1 billion in Q4, despite a drop in net profit (26.2 billion on $127.6 billion in revenue).
This strategy comes as Google faces massive AI infrastructure costs (51.4 billion in Q3) and pressure on profitability. Its stock has fallen 11 %, reflecting investor concerns over shrinking margins and the lack of immediate ROI in AI.
What it changes for you
- Marketing & AdvertisingAdvertisers need to prepare for increased integration of ads in AI search results, with more targeted formats and opportunities in the early stages of the purchase journey.
This summary gives you the essentials. The full article, its figures and quotes are on Next.
Read the original articleAI-generated summary of the source, checked by rules. How we write · Report an error