Google is making big changes to how advertising works in Search. At Google Marketing Live 2026, the company introduced a new generation of formats called Ads in AI Mode, built to sit right inside the answers Gemini writes. The goal is no longer just showing an ad on a results page. Google wants advertising to feel like a natural part of the AI conversation.
This shift comes as AI Mode passes one billion monthly users, according to Google. Searches there are reportedly three times longer than in regular Search, and voice and image-based queries are growing fast. That leaves Google with an obvious challenge. Its classic ad model has to fit conversational interfaces, where blue links and plain text ads are slowly losing ground.
Google wants ads built right into AI answers
The biggest change is probably how ads now show up in AI Mode. Until recently, paid placements stayed fairly separate from the AI-generated response. With Ads in AI Mode, Google is starting to merge the two.
Two formats are being tested in the US right now, Conversational Discovery Ads and Highlighted Answers.
With the first one, Gemini creates an ad on the fly that fits the person’s exact question. Google’s example is someone asking how to make their home smell like a spa or a damp forest without much upkeep. Gemini then builds a tailored ad response that highlights products matching what that person is really after.
Highlighted Answers goes a step further. When AI Mode serves up a list of recommendations, sponsored picks can now appear right in the middle of the suggestions. A language learning app, a beauty product or a service could become a sponsored answer woven into Gemini’s own reasoning.
Google stresses that these ads are always clearly labeled as Sponsored. Even so, this is a major shift. The ad no longer sits around the answer. It becomes part of it.
Gemini now writes part of the ad for brands
Another big change is how much Gemini is involved in building the ads themselves.
In the new AI-powered Shopping Ads, Google doesn’t just pull a product from a Merchant Center feed anymore. Gemini adds an AI explainer, a short automatic summary of why a product might fit what the shopper is looking for.
Say someone searches for an espresso machine. They could see a product card with a price and a photo, along with a Gemini-written note explaining why that model suits the needs they described.
This changes Shopping campaigns at their core. For years brands had direct control over their titles, descriptions and sales pitches. Now Google is adding its own layer of persuasion on top.
One detail is especially telling. Google says the AI explainer runs independently from whatever the advertiser provides. Gemini reads the product data, reviews, context and other available signals, then writes its own pitch.
Search campaigns are turning into conversations
Google is bringing the same conversational approach to lead generation with a format called Business Agent for Leads.
Instead of a basic static form, the ad now includes a chat agent powered by content from the brand’s website. Users can talk to it directly inside the ad.
Google uses the example of a student researching universities. Rather than filling out a contact form, the student can ask about tuition, available programs, admission requirements or housing right there in the ad.
For advertisers, this turns Search ads into a way to pre-qualify leads through conversation. The lead doesn’t start after a click to the website anymore. It begins inside Google.
Direct Offers bring ads even closer to the sale
Google also announced a major expansion of Direct Offers, a program it launched in early 2026.
Brands like Gap, L’Oréal and Chewy already use it to show context-based promotions in AI Mode. Now Google is adding several pieces. Gemini can bundle promotions automatically, merchants that support UCP get native checkout, and travel deals are coming through Booking and Expedia.
For retailers this gets interesting. A brand can hand over several promotions or coupons, and Gemini picks the best combination based on the search and the user’s situation. Instead of a generic discount, Google can put together a product bundle or a tailored deal that fits what the shopper seems to want.
Thanks to the Universal Commerce Protocol, some purchases will be completed right inside Google without sending people to the retailer’s site. Google is pulling the whole sales funnel into its own platform, helped along by its Universal Cart.
The idea is simple. Shrink the gap between searching, getting a recommendation and buying.
AI Max and Performance Max become the required foundation
Behind all these formats, Google is steadily steering advertisers toward a setup run entirely by AI.
The company openly recommends AI Max for Search, AI Max for Shopping and Performance Max. This move is picking up speed. Google has already said Dynamic Search Ads will be phased out in favor of AI Max starting in September 2026.
Classic Search campaigns are gradually becoming a layer that Gemini runs. It handles understanding intent, creating ads, matching queries, recommending products and now writing the sales pitch too.
Google claims AI Max campaigns bring in 27% more conversions at a similar CPA or ROAS compared with campaigns built mainly on exact and phrase match keywords.
Analysis, Google is turning Search ads into a conversational recommendation engine
Ads in AI Mode are much more than an update to Search ads. Google is slowly redefining where advertising fits into the way people search.
The real change is this. Ads stop being interruptions and become tailored answers written by AI.
That opens a big opportunity for brands that feed Google’s systems with rich data, clean product catalogs and trustworthy content. It also makes brands more and more dependent on Gemini as the middleman between them and their customers.
For years advertisers focused on keywords and landing pages. Going forward, they’ll need to focus on how well AI understands their products, how strong their data signals are and whether they can become the best answer in a conversation.
Search marketing is entering a stage where the fight isn’t only about being seen. It’s about being understood, summarized and recommended by AI.