Google Expands AI Search Ads Globally as Core Advertising Growth Decelerates

Alphabet has announced the global expansion of advertisements within its AI-powered Search experiences. The update was shared during the company's third-quarter earnings call, reflecting a strategic push to generate new revenue streams as growth in traditional search advertising slows.

Financial Context and Core Search Growth

During the earnings report, Alphabet stated a total revenue of $127.6 billion, marking a 25% increase year over year. However, core Search advertising growth showed signs of deceleration:

• Search Revenue Growth: Reached 12% year over year in the third quarter.
• Previous Quarters: Down from 17% growth in the second quarter and 19% in the first quarter.
• Stock Reaction: Following the release of the financial results, Alphabet shares dropped by 8%.

Despite the deceleration in traditional search growth, Google's overall Google Services division brought in $96.3 billion (an 11% year-over-year increase), while Google Cloud revenue rose significantly to $30.7 billion.

Scaling AI Ads Internationally

Executives reported that the company is scaling high-quality ads inside AI overviews and AI mode to a broader audience of users and queries. Key points from the announcement include:

• International Rollout: The monetization footprint for AI mode is expanding globally for the first time.
• New Formats: The rollout includes multi-turn ads in the United States alongside international markets.
• Performance Claims: According to company leadership, early results indicate that click-through rates for sponsored product listings within AI mode are comparable to organic listings, with user research suggesting the ads are perceived as relevant.

Shifting Search Habits and Multimodal Queries

Google leadership highlighted that generative AI features are altering how users interact with the search engine. According to reported statements:

• Query Length: Search queries in AI Mode are reportedly three times longer on average than traditional searches.
• Multimodal Usage: One in five AI Mode searches globally involves voice, images, or documents, with visual searches surpassing 50 billion per month.
• Query Volume Growth: CEO Sundar Pichai stated that search queries grew at their fastest year-over-year rate in five years, driven partly by longer, more complex, and personalized user interactions.

Practical Implications and Verification

For advertisers and digital marketers, the global expansion means new opportunities to reach audiences through conversational discovery ads and sponsored recommendations integrated directly into AI-generated answers.

Readers and industry observers can verify these announcements and review detailed financial reports by accessing Alphabet’s official investor relations communications and earnings webcasts from the third-quarter report.