By the Mayab Media Team
Alphabet reported its third quarter on October 28, and one phrase from the earnings call is worth keeping. Philipp Schindler, Google's chief business officer, said AI Mode's growth weighed on Search results "because of the lower monetization we were seeing in AI Mode."
Translation: a search inside AI Mode currently earns Google less than a classic results page.
That matters to anyone buying Search ads, because Google rarely leaves money on the table for long.
The numbers, minus the spin
Search and other revenue came in at $63.4 billion, up 12% from $56.6 billion a year earlier. Respectable. But growth was 17% in Q2, and PPC Land worked out that Search revenue rose only about $79 million from the previous quarter. Google's total advertising line grew about 11%, to $82.0 billion.
Schindler was careful. He said currency swings were the single biggest reason growth slowed versus Q2, and that Google feels "very good" about its trajectory. Fair enough. Still, he named AI Mode on an earnings call, and companies don't do that casually.
(Sundar Pichai's framing was that Google builds the best experience first and monetizes after. That's the order. The second part is now arriving.)
Where the extra ads are going
Google didn't wait long. The same day, it said ads in AI Mode were scaling to 10 more markets, including Australia, Canada, India and Singapore, with Brazil, Mexico and the UK planned for Q4. In the US, it's launching what it calls multiturn ads.
Those are the ones to watch.
A multiturn ad can show up on the answer to a follow-up question, when someone keeps chatting with AI Mode instead of starting a new search. They're labeled "Sponsored." Picture the flow. Someone asks AI Mode about tankless water heaters and gets a comparison. Then they type "which of these can a plumber install this week, and what would it cost?" That second query is long, specific and very commercial. Google says AI Mode queries already run about three times longer than traditional searches, a figure from its May report on US usage.
Queries like that don't match tidy keyword lists. They get picked up by broad match, AI Max and Performance Max. So the more ad slots Google opens in follow-ups, the more of your spend flows through automated matching. Planned or not.
This is why the opt-out question keeps coming up with clients. If your campaigns run broad match or AI Max, Google already treats AI Mode as one more place your ads can appear. Multiturn ads stretch that to conversations that began with a question you never bid on, which is great when the follow-up is a buyer and a waste when it's a student writing a report.
What we're telling clients to do
We're not panicking about this, and you shouldn't either. Google says click-through rates for sponsored and organic product listings in AI Mode are already similar. That's one internal measurement from late August to early September, so treat it as a claim, not a verdict.
But we are tightening a few things:
- Read search terms weekly, not monthly. Export them and sort by length. If the long ones are relevant and converting, fine. If they're research questions with no buying intent, add negatives.
- Give Smart Bidding a real target. Maximize Conversions with no target CPA or ROAS is how a new ad surface quietly eats budget. If a lead is worth $120 to you, say so in the bid strategy.
- Make landing pages answer the follow-up. Someone arriving from a follow-up query already knows the basics. Send them to a page with prices, availability and specifics, not your homepage.
- Retailers: fix your Merchant Center feed. Product listings are where Google claims AI Mode ads already hold up. Thin titles and missing attributes put you at the back of that line.
- Watch average CPC for the next two months. Say you spend $4,000 a month at a $2.50 average CPC. That's 1,600 clicks. If CPC creeps to $2.90 with no lift in conversions, the same $4,000 buys about 1,380 clicks. That's 220 fewer clicks for the same money.
What nobody knows yet
Plenty. The earnings release didn't break out paid clicks or cost per click. Google's announcement said nothing about separate AI Mode reporting or an opt-out. We don't know how multiturn ads are priced against regular Search, or whether the extra inventory pushes clicks cheaper or pricier. Anyone giving you a confident answer today is guessing, and we'd rather tell you that than invent a benchmark.
What we'd skip: rebuilding campaigns around AI Mode, or pausing broad match out of fear. Neither makes sense until there's data in your own account to justify it.
Our read? More ad space in a surface people use for detailed research could suit local service businesses with clear pages and real prices. It's worse news for accounts on autopilot, with loose broad match and an empty negative list.
Google just told investors AI Mode needs to earn more, and your ad account is where that happens.
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