Google used 2026 Google Marketing Live to introduce two AI-native ad formats for AI Mode: Conversational Discovery ads and Highlighted Answers. Both rely on Gemini to generate or align ad content with a user’s query in real time, shifting ad exposure away from fixed placements on the search page and into the AI response itself.
Gemini assembles ad creative around the live query
Conversational Discovery ads push search advertising beyond classic keyword matching. Advertisers still supply the creative assets, but Gemini builds the ad presentation around the specific question a user is asking in AI Mode. The ad is no longer just selected from a preset list. It is adapted to the context of that query on the spot.
Highlighted Answers takes a different position inside the interface. When AI Mode returns a ranked or list-style answer, such as a set of recommended apps or products, a closely related ad can appear directly inside that answer block with a Sponsored label rather than sitting in a sidebar or lower on the page.
Google is also pairing both formats with a separate AI explanation. Gemini provides an assessment and summary of the product next to the advertiser’s own material. Google describes this as a transparency feature, though the source article notes that the meaning of “independent” will be questioned when both the evaluation layer and the ad system are controlled by the same platform.
Google is moving ads into answers as clicks weaken
The launch reflects a larger change in search behavior. Google Search Vice President Liz Reid has argued that revenue under AI Overviews has remained relatively stable because lower click volume has been offset by higher search volume. The article cites Q4 2025 search ad revenue of $63.07 billion, up 17% year over year, with growth accelerating across four quarters: 10% in Q1, 12% in Q2, 15% in Q3, and 17% in Q4.
That does not remove the structural issue. The same report says paid search CTR has fallen by 8 to 12 percentage points, which means advertisers may be getting less traffic reach for the same spend. On the organic side, the pressure is sharper. As AI Overviews keep answers on the search page, the zero-click rate has climbed from 56% to nearly 69%, while organic click-through rates have dropped 34.5%. For traffic-dependent publishers, that directly affects ad revenue and subscription conversion.
Google’s response is to reposition the ad unit. If fewer users leave the results page, the ad has to appear where attention now sits: inside the answer.
Shopping, lead generation, and checkout are being pulled into search
Google is extending the same logic beyond AI Mode. AI-powered Shopping ads target categories with longer consideration cycles, including refrigerators, televisions, and coffee machines. Gemini identifies products it sees as most relevant and writes tailored explanations around them. Business Agent for Leads replaces static inquiry forms with a live conversation window, letting users talk to a brand’s AI agent instead of filling out a form after clicking an ad.
The article also points to Direct Offers. Brands can upload discount rules, and Gemini will assemble the most relevant offer for a given query. Combined with Universal Commerce Protocol, the system is designed to let users complete checkout without leaving the search page. Booking and Expedia are already part of a pilot that surfaces travel deals while AI is helping plan a trip.
Advertisers are being pushed toward AI Max products
For advertisers, Google’s message is clear. Full access to these newer ad formats is tied to products such as AI Max for Search, AI Max for Shopping, and Performance Max. Performance Max is Google’s cross-platform automated campaign type, where Gemini can allocate budget across Search, YouTube, Gmail, and Discover. AI Max extends that model inside search by expanding keyword coverage and optimizing creative in real time.
That leaves advertisers still focused on traditional keyword bidding with less access to the newest placements. Publishers face another squeeze as well. AI Overviews had already reduced organic traffic flowing out to websites, and now ad inventory is moving into AI answers too, shrinking the role of content platforms as both traffic destinations and ad surfaces.
The article closes on the competitive angle. OpenAI, Anthropic, and Perplexity are all building AI search products, but they do not have Google’s decades-old ad infrastructure, advertiser relationships, or a commerce protocol that connects search responses directly to transactions. Generating AI answers is one challenge. Embedding monetization inside those answers is another.