For years, Google has been steadily steering its ad business toward an AI-driven future, introducing tools like Performance Max (PMax) and AI Max for Search. These rollouts, in hindsight, appear to be stepping stones toward a fully automated, AI-powered ad ecosystem. With these campaign types, Google has shifted control away from advertisers, handing more decision-making to its algorithms, systems that now determine target audiences, select ad placements and formats, set bids, and increasingly generate creative assets.
All of these innovations are converging in Google’s biggest ad debut of the year: ads in AI Mode. AI Mode is an alternative to the traditional list of blue links, with AI-generated conversational answers that include far fewer referrals to external websites. For now, it will be optional and will appear both as a tab and an option within the search box itself.
This feature, activated via a toggle on Google.com, takes users into an alternative search environment powered by the Gemini large language model. In this mode, answers are generated directly within the interface, meaning users might not need to leave AI Mode at all. Similar to ChatGPT or AI search tool Perplexity, it’s designed for research, shopping inspiration, event planning, and other scenarios where the internet comes to the user, rather than the other way around.
According to Google’s own blog, “AI Mode is rooted in our core quality and ranking systems, and we’re also using novel approaches with the model’s reasoning capabilities to improve factuality. We aim to show an AI-powered response as much as possible, but in cases where we don’t have high confidence in helpfulness and quality, the response will be a set of web search results.”
Industry reactions are already coming in. “This is going to change everything and it’s going to change every strategy,” says director of SEO at agency JBH Andrew Holland.
An internal Google document, obtained by AdAge, sheds light on how advertising will work within AI Mode. Rather than relying solely on keyword-based targeting, Google plans to deliver ads based on the full context of a user’s AI-driven conversation. This represents a notable shift from the traditional search model.
The guidance, in a section called “Ads in AI Mode,” explains that ad placement will be influenced by more exploratory or complex queries that arise during these conversations. “The big shift is from queries to conversations,” a marketing executive familiar with the rollout told AdAge.
Until now, Google has only lightly tested ads within AI Mode, and few have appeared publicly. The feature already has 100 million monthly users, according to the company’s latest earnings report, making it a high-stakes platform for Google’s future, even if it remains something of an unknown for brands.
Advertisers familiar with Performance Max and AI Max for Search will find those skills essential as AI Mode rolls out. They’ll need to determine how this new environment fits into their broader marketing mix and whether it delivers results comparable to traditional search. Evaluating performance will depend on the data Google provides, such as which queries drive clicks or conversions, while also accounting for blind spots where Google’s systems operate as a “black box.”
Historically, Google hasn’t always shared detailed search query reports, a sore point for advertisers wary of losing transparency. Some brands have resisted fully automated campaigns like PMax for that reason, but agency leaders warn that avoiding such formats could leave them at a disadvantage as AI Mode becomes more central.
In recent weeks, Google has begun briefing advertisers on its vision for monetizing AI Mode. “That’s where things like AI Max for Search ads or PMax are purpose-built to be agile and forward compatible to really truly help marketers [with AI Mode],” said Brendon Kraham, Google’s VP of global commerce and ads solutions.
