Google takes AI Search ads global as core search ad growth keeps slowing

Google is taking the ad slots inside its generative AI search experiences outside the United States. On Wednesday's third-quarter earnings call, the company said it is expanding ads in AI Mode into international markets, adding multi-turn ads in the U.S., and scaling ads within AI Overviews to more users and more queries.

"We are now scaling high-quality ads within AI overviews in AI mode to more users and queries," chief business officer Philipp Schindler told investors. "This includes taking our monetization footprint global for the first time." According to TechCrunch, that was the clearest official statement of the expansion.

Early signals, per Google, are encouraging. Schindler said click-through rates for sponsored product listings in AI Mode are already comparable to those for organic listings, and that the company's user research shows people find the ads relevant. Google also pointed to a set of Gemini-powered formats, including conversational discovery ads that respond to user questions and sponsored recommendations woven into AI-generated answers.

The backdrop is less comfortable. Alphabet posted $127.6 billion in revenue, up 25% year over year, while search advertising grew 12% — down from 17% in the second quarter and 19% in the first. Alphabet shares fell 8% after the results.

Search usage itself is accelerating. CEO Sundar Pichai said query growth was the fastest year-over-year rate in five years without disclosing the figure, that AI Mode queries are three times longer on average than traditional searches, that one in five AI Mode searches globally involves voice, images or documents, and that visual searches exceed 50 billion a month.

Other segments keep funding the AI buildout. Google Services, which includes Search, generated $96.3 billion in revenue, up 11%, and Google Cloud revenue rose 103% to $30.7 billion.

The numbers put Google's problem in plain view: AI is turning Search into a busier, more complex entry point while diluting the classic ad slots that funded it, so the company has to prove that ads inside AI answers can offset the slowdown in core search advertising. International markets are the variable that decides whether that proof scales.

Three things to watch: whether AI Mode ad click-through and conversion hold up outside English-speaking markets, whether multi-turn ads change how advertisers allocate budgets, and whether regulators tighten labeling requirements for commercial content inside generated answers.