Google Signals How it Will Monetize AI (for now)

It was only a matter of time. Google has started to integrate ads into its relatively new AI Overviews. As you’ve probably seen, these overviews take over the prime top section of Google SERPs, containing answers and source links to a given question or search query. It’s part of Google’s future in search.

And in true Google fashion, you can now expect to see sponsored links there too. These will show up as overviews that carry a “sponsored” label, and are intermixed with organic AI Overviews. So just like regular paid search results, they will look like their organic counterpart, but be labeled differently.

The sponsored results/overviews will be pulled from existing AdWords campaigns, including Google Shopping and Search. This presumably means that advertisers won’t have to do anything extra to be included in AI overviews, but that could change in terms of opt-in/out settings as the program develops.

Indeed, an opt-out – or some level of control for AdWords advertisers – could be pressured due to brand risk. Though AI is hot, it’s still experimental as Google Overviews serve questionable results such as telling users to put glue on pizza. In fairness, AI Overviews continue to improve in tangible ways.

Monetization vs. UX

Another thing that will evolve is the SERP itself, as Google continues to optimize the design and balance monetization versus user experience. For example, one example Google gave was a sort of sponsored AI overview carousel (see above). It sits amongst organic overviews and cycles through sponsored results.

Sliders and carousels represent one way to maximize inventory given limited real estate, but could also be a bit cluttered. Again, Google will have to experiment to get the right balance of ads and organic UX. The latter will be a function of user responses to the new setup, which will take time to synthesize.

Speaking of user response, the overall reaction to AI Overviews (prior to ads being integrated) has been fairly positive. Google reports that Overviews have boosted search engagement meaningfully (no specific numbers provided) among the active and spending-empowered 18 to 24 demographic.

However, Overviews haven’t received the same warm welcome on the publisher side of the equation. That’s because they’re the latest step in a year-long procession of Google moves that drive “zero-click searches.” When the answer is given right within the SERP, there’s less need to click to the source.

Google Reminds Us It’s Primed for AI

Offers, Not Ads

Back to the part about Google’s role in the AI era, it could be dominant. In early days, it was late to jump on AI as Microsoft made moves with OpenAI and Bing Chat. It got lots of flak for that. But as you may or not recall, our position at the time was that Google will be just fine. It has all the ingredients for AI.

That argument covered Google’s AI capability on technical levels. The remaining question is Google’s motivation to integrate AI when it could torpedo its own search model. In other words, one answer to one question (sort of like voice search), doesn’t have the same inventory of ad slots as traditional SERPs.

As we’ve discussed with AI & search thought leaders like Yext CDO Christian Ward, Google could make up for that diminished quantity of ads with a higher quality of ads. In other words in an AI-based context, Google can hypertarget sponsored content that brings it more into the realm of offers, not ads.

And those will carry much higher premiums to the point where the total value offsets the decline in the quantity of ads. Or at least that’s the idea at a high level. In the meantime, Google is stepping towards that end and, for now, has partially answered the question of how it plans to monetize AI Overviews.

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