Google has been quietly and then not-so-quietly monetizing its AI search features. As of April 2026, ads now appear in 25.5% of AI Overview results, up 394% year-over-year. Google AI Mode has over 75 million active users, and the company is testing ads with direct purchase offers inside AI Mode conversations.
For advertisers, this represents both a challenge and an opportunity. The search landscape is fundamentally changing, and your paid search strategy needs to change with it. Here is what is happening, how these new ad placements work, and how to optimize your campaigns for the AI-powered search era.
Where Ads Appear in AI Results
Google has implemented several ad placement types within its AI features. In AI Overviews, ads appear at the bottom of the AI-generated summary, positioned as relevant sponsored results that complement the AI answer. In AI Mode, a new shopping ad format surfaces below organic product recommendations, with sponsored retailer listings appearing alongside results for conversational shopping queries.
The placement called “AI Mode Bottom Ads” is ready for broader deployment, and Google is actively testing additional placements within the conversational AI interface. These ads are designed to feel contextual and relevant rather than intrusive, following the pattern Google established with search ads two decades ago.
For shopping and e-commerce advertisers, the opportunities are particularly significant. Product ads appearing alongside AI-generated shopping recommendations catch users at a high-intent moment when they are actively evaluating purchase options within the AI conversation.
How AI Placements Affect Campaign Performance
Early data from advertisers running campaigns with AI placements shows mixed but promising results. Click-through rates on AI Overview ads tend to be lower than traditional search ads because the AI answer often satisfies the user’s query. However, users who do click tend to convert at higher rates because the AI has pre-qualified their intent and the ad appears in a highly relevant context.
Users spend an average of 49 seconds per AI Mode session compared to 21 seconds for regular AI Overviews. This longer engagement time means users are more deeply invested in their query when they encounter an ad, which correlates with higher conversion rates and average order values.
The net effect for most advertisers is that AI placements deliver fewer clicks but higher-quality traffic. Your cost per click may be higher, but your cost per conversion and return on ad spend can improve when AI placements are properly optimized.
Optimizing Your Campaigns for AI Placements
Your existing Search and Performance Max campaigns are already eligible for AI Overview and AI Mode placements. Google automatically includes these placements when they are available. However, there are specific optimizations you can make to improve performance in these new contexts.
Ad copy needs to complement AI-generated content rather than repeat it. If the AI Overview already answers the user’s question, your ad needs to offer something the AI did not provide: a specific product, a unique offer, expert consultation, or an action the user cannot take within the AI interface. Focus your headlines and descriptions on what you uniquely offer beyond the information already presented.
Landing page relevance becomes even more critical in AI contexts. Users arriving from AI placements have already received detailed information about their query. Your landing page needs to build on that knowledge, not repeat it. Optimize for next-step actions: product selection, booking, purchasing, or requesting a quote.
Budget Allocation for the AI Search Era
With AI placements now representing a growing share of search ad inventory, you need to consider how your budget allocation should shift. We recommend monitoring your placement reports in Google Ads to understand what percentage of your impressions and conversions come from AI placements versus traditional search results.
If AI placements are delivering strong ROAS, consider increasing your bids or budget to capture more of this inventory. If they are underperforming, review your ad copy and landing pages for AI-context optimization before pulling back budget.
The Demand Gen campaign type is seeing significant updates, with shoppable CTV going fully live and additional creative testing capabilities. Consider using Demand Gen campaigns alongside your Search campaigns to capture users across the full range of Google’s AI-powered surfaces.
Preparing for Expanded AI Ad Inventory
Google’s VP of Ads and Commerce has made the company’s direction clear: 2026 is the year ads inside AI Mode stop being experimental and become a primary placement. This means the 25.5% figure will only grow. Prepare your campaigns for a future where a significant portion of your paid search traffic comes through AI-generated contexts.
Build AI-specific ad creative that works in conversational contexts. Test different value propositions that complement rather than compete with AI answers. Optimize your landing pages for users who arrive pre-informed by AI. And track AI placement performance as a distinct segment in your reporting.
Key Takeaways for Your Q2 Strategy
Review your placement reports to understand your current AI ad exposure. Create AI-optimized ad copy variations that offer value beyond what AI answers provide. Ensure your landing pages serve pre-informed users ready to take action. Monitor the growth of AI placements in your campaign mix and adjust budgets accordingly.
The AI search era is not coming. It is here, with 75 million users and ads in one out of every four AI results. The advertisers who optimize for this reality now will have a significant advantage as AI placements grow to dominate the search advertising landscape.