Google to Introduce Ads to AI-Powered Search Generative Experience

Google’s parent company, Alphabet, reported strong third-quarter earnings with notable growth across all its ventures. The Search business emerged as the top earner, experiencing an 11 percent year-on-year increase, reaching a total of $44 billion. Additionally, Search has witnessed expanded utilization of AI integration, referred to as Search Generative Experience (SGE). Google now aims to transform SGE into a reliable source of revenue by introducing advertisements. Furthermore, Google emphasized that it sees SGE as a potential product capable of eventually replacing Search.

According to a report by The Verge , Google CEO Sundar Pichai emphasized the company’s commitment to finding native formats to test how SGE’s ads work on the earnings call and how its content stream can be displayed there. In fact, Google introduced some ways in March to show relevant ads to users, with many expressing concern that they are intrusive and “full of ads.”

But now it looks like Google is going deeper to integrate ads into its AI search product. During the call, Business Director Philipp Schindler emphasized: “It is extremely important to us that in this new experience advertisers still have the opportunity to reach potential customers in their search journey”.

Google displays ads on SGE

Although these are relevant ads, it can be quite frustrating if the ads are shown frequently. For example, the March disclosure found that every follow-up query to the original search resulted in a sponsored product placement. While this gives advertisers more relevant exposure, it can turn off potential customers. It seems Google is also aware of the possibility.

“We’re making sure that the product works well, and we’re creating value for our ecosystem, and that the ads are moving well,” Pichai said as the SGE rollout continued.

On the plus side, Google doesn’t have to worry about revenue, so it can take some time to ensure that ads don’t interfere with the product experience. According to the earnings release, all of the company’s most important business operations have grown year-on-year. The company earned $7.9 billion in revenue from YouTube ads, and has generated $59 billion in overall advertising revenue. If Google plays its cards right, it could post an even bigger number next quarter with its new ad property on SGE.