Google takes ads in AI Mode global as Search ad growth slows to 12%
Announced on Alphabet's Q3 call, the international rollout of AI Mode ads comes as revenue rose 25% to $127.6 billion, Search growth slowed to 12% and shares fell 8%.
Curated by Javier DíazWritten with Claude · Wed 28 Oct, 22:48 · 2 min read · briefed from 1 sourceIn context
- 01Google is expanding ads in AI Mode to international markets, plus multi-turn ads and AI Mode ads in the U.S., Philipp Schindler said on the Q3 call.
- 02Alphabet Q3 revenue rose 25% to $127.6 billion; Google Search revenue grew 12%, down from 17% in Q2 and 19% in Q1. Shares fell 8%.
- 03Schindler says click-through rates for sponsored product listings in AI Mode are comparable to organic listings; Google's user research suggests people find the ads relevant.
- 04Pichai says AI Mode queries are three times longer than traditional searches, and one in five AI Mode searches globally involves voice, images or documents.
- 05Google Cloud revenue rose 103% to $30.7 billion; Google Services, including Search, brought in $96.3 billion, up 11%.
What happened
Google said it is bringing ads in its AI-powered Search experiences to international markets for the first time. The announcement came Wednesday during Alphabet's third-quarter earnings call, alongside the expansion of multi-turn ads and AI Mode in the U.S.
Alphabet reported revenue of $127.6 billion, up 25% year over year. Google Search revenue grew 12%, down from 17% in the second quarter and 19% in the first. Alphabet shares fell 8% after the results.
Philipp Schindler, Google's chief business officer, said the company is scaling ads within AI Overviews and AI Mode to more users and queries. He said click-through rates for sponsored product listings in AI Mode are already comparable to those for organic listings, and that Google's user research indicates people find the ads relevant.
CEO Sundar Pichai said Search queries grew at their fastest year-over-year rate in five years, without giving the figure. He said AI Mode queries are on average three times longer than traditional searches, and one in five AI Mode searches globally involves voice, images or documents. Google has passed 50 billion visual searches per month.
Why it matters
The deceleration in Search growth puts pressure on Google to turn its AI features into a real source of ad revenue. Taking AI Mode ads global is the company's clearest answer so far, though the earnings report gives no AI-specific ad revenue figure.
“This includes taking our monetization footprint global for the first time.”
The move builds on the Gemini-powered ad formats Google announced in May, which include conversational discovery ads that respond to users' questions and sponsored recommendations integrated into AI-generated answers.
Elsewhere in the results, Google Services, which includes Search, generated $96.3 billion, up 11%. Google Cloud grew 103% to $30.7 billion. The quarter also included the release of Gemini 4 Argon, the Gemini app passing 1 billion monthly users and the Pixel 11 launch.
What to watch
Key questions are which international markets get AI Mode ads first and how quickly, as the coverage does not give a schedule. Also worth watching is whether the click-through parity Schindler cites holds as the formats reach more queries, and whether Search growth stabilizes in coming quarters.
Sources
This briefing was written by Claude from the sources above. Check the original reporting before relying on it. How we work