Google’s latest earnings call has caused quite a kerfuffle on the stock market.
It turns out that Google’s AI Mode, the AI summaries that help answer user search queries right on the search page instead of directing them to the most authoritative links, is eating into the company’s ad revenue — an extremely predictable problem. There’s even a term for the phenomenon — zero-click searches.
This is an obvious problem for Google Ads, a pay-per-click advertising service that generates billions of dollars in revenue each quarter. Google isn’t going to backtrack on AI; the company has too much invested into the technology now. So, what’s Google’s fix?
More ads.
As Ars Technica points out, in Google’s financial disclosure, the company shared plans to bring even more search ads into AI Mode.
Google currently shows contextual ads within AI Mode alongside the AI-generated responses to user queries. However, Google is planning to include even more ads by swapping out sponsored links throughout a user’s session as they interact with the AI Mode chatbot. In addition, Google will soon be rolling out AI Mode ads in international markets as well.
The search giant did warn investors that this won’t be a quick fix. Google currently earns less via AI Mode ads than from traditional search ads as there are fewer advertisers running ads in AI Mode. In addition, it will take some time, Google says, for advertisers to understand the benefits of running ads in AI Mode too.
Regardless, Google will go forward with its AI plans, even at the expense of a major revenue driver, Google Search ads. In the meantime, users will be seeing more ads.