Google will expand ad placements in AI Mode, as AI search slows revenue growth
On Alphabet's Q3 2026 earnings call, Senior Vice President and Chief Business Officer Philipp Schindler said that the strong growth in AI Mode queries dragged down search revenue due to lower monetization rates. Google plans to place more ads in AI Mode, expanding ads to international markets for the first time, and launching multi-turn ads in the U.S. that change as the conversation progresses, while also expanding ads in AI Overviews. In the quarter, Google Search and other advertising revenue grew 12% to $63.3 billion, a slower pace than the previous quarter; Schindler said exchange rates were the single largest factor in the search deceleration relative to the second quarter, and some retail advertisers in Asia-Pacific were also affected by the EU's removal of the low-value parcel tariff exemption. Pichai said AI Mode queries are on average three times longer than traditional searches, one in five AI Mode searches worldwide uses voice, images, or documents, and the Gemini App has reached 1 billion users.
#Industry news#Google#Search
