Google says AI Mode ads monetize less than traditional search

By Elena Vasquez

At the 37-minute mark of Google’s latest earnings call, Philipp Schindler confirmed that ads in AI Mode generate less monetization than ads in traditional search.

Schindler, Google’s senior vice president and chief business officer, tied that gap to strong AI Mode query growth. Google did not quantify the shortfall. The company disclosed no revenue, click-through, conversion, or market-level figures.

What did Google confirm about AI Mode monetization?

Schindler said: “The strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode.”

The statement confirms weaker ad yields. It does not isolate the cause. Nor does it show whether AI Mode reduces total search advertising revenue.

Glenn Gabe summarized the point in an October 29, 2026 post on X: “Each AI Mode query currently makes less than a traditional search, and he coupled that with the claim that monetization will improve over time.”

That reading matches Schindler’s wording, although Google supplied no timetable. It also presented expected improvement as a claim, not a measured result.

AI Mode encourages searchers to query more often. Multiturn ads create additional inventory across those follow-up searches. More impressions do not necessarily offset lower monetization on each query.

The disclosure identifies lower monetization, stronger query growth, and an expanding ad rollout, but it gives no revenue figure, click-through rate, conversion rate, audience size, or market list.

Takeaway: AI Mode currently monetizes less, but Google has not disclosed the size of the gap.

How does AI Mode differ from AI Overviews?

Google previously said that ads on AI Overviews earn the same as ads without AI Overviews. That claim applied specifically to AI Overviews. Schindler did not extend the parity statement to AI Mode.

Google’s earlier AI Overviews statement therefore does not answer the AI Mode question, and treating the two surfaces as equivalent would erase the distinction Schindler made during the earnings call.

The source also raised a separate concern: AI Mode ads might resemble organic results and mislead users. Google did not confirm such a design change. Nothing in the disclosure establishes that purpose.

Takeaway: AI Overviews parity does not establish AI Mode parity.

What is Google scaling now?

Schindler described the ad experiments as promising. He said Google was scaling ads in both AI Overviews and AI Mode to more users and more queries.

He also cited broader market availability and multiturn ads in the United States. Gabe characterized the announcement as international expansion alongside U.S. multiturn ads. The disclosure followed another AI Mode ad expansion reported the previous night.

Google still withheld the query volume, ad format, market count, launch schedule, and performance baseline needed for advertisers to judge the expansion or forecast revenue.

“Promising” remains Google’s own characterization. The company disclosed no experiment design, sample size, click-through rate, or conversion result. The claimed trajectory therefore lacks supporting metrics.

Takeaway: Google is expanding AI Mode advertising without publishing performance evidence.

What slowed search growth from Q2 to Q3?

Schindler described a lower growth rate from Q2 to Q3 and cited several drivers. He gave no percentage and did not identify the year in the source.

• Foreign exchange. Foreign exchange, or FX, was the single largest driver of search deceleration relative to Q2.
• Retail. Some APAC advertisers faced effects from the EU eliminating its de minimis exception.
• Media and entertainment. Spend normalized after an unseasonably strong Q2 driven by the FIFA World Cup. June had more matches and more allocated advertising budgets than July.

The published call video places Schindler’s slowdown comments at 36:25. Currency effects and sector comparisons explain much of the disclosed slowdown, although neither disclosure quantifies AI Mode’s contribution to Google’s underlying search advertising performance.

Takeaway: Currency and sector effects complicate the quarter-to-quarter search comparison.

Which verticals and site types face the exposure?

The retail disclosure concerns advertiser spending. It does not quantify traffic, revenue, or ad prices for retail sites. The media and entertainment disclosure describes a seasonal comparison effect, not a site-level performance result.

For publishers, brands, and ecommerce merchants, the larger question is query intent. Gabe argued that many AI Mode queries sit at the upper funnel, meaning early research before a purchase decision. That interpretation offers one possible link to weaker monetization, but Google published no query distribution or conversion evidence.

Multiturn ads can add impressions during longer search journeys. The source does not show whether those extra placements compensate for lower yields on research-heavy queries.

Vertical exposure is clearer than site-level impact. Advertisers in retail and media may face budget shifts, while publishers and brands face an unquantified search monetization question.

Takeaway: The vertical spending effects are clearer than the consequences for any site type.

What should readers monitor next?

The next disclosure should separate several signals:

• AI Mode monetization. A revenue or yield comparison with traditional search.
• Ad rollout. Market count, user reach, formats, and the scale of multiturn ads.
• Vertical spending. The lasting effect of the EU policy change on APAC retail budgets.
• Site performance. Click-through, conversion, and query-intent data by publisher, merchant, and brand site type.

The next earnings disclosure will be more useful if Google separates AI Mode revenue, query volume, ad load, and monetization from traditional search rather than repeating its qualitative trajectory claim. Monitor the next update for an actual AI Mode monetization measure; qualitative confidence alone will not resolve the revenue question.