Google is taking ads in its AI Mode search experience beyond the United States for the first time, as the growth of its core search advertising business slows. The announcement came on Alphabet's third-quarter earnings call on 28 October 2026.
The numbers show why the move matters. Alphabet reported revenue of $127.6 billion, up 25% from a year earlier. Google Search & other revenue rose 12% to $63.35 billion, according to the earnings release Alphabet filed with the SEC. TechCrunch reports that Search growth was 19% in the first quarter and 17% in the second, so the pace has slowed for two quarters in a row. Alphabet shares fell after the results.
Why would ad growth slow while Search use grows? Google says Search queries grew at their fastest rate in five years. But chief business officer Philipp Schindler told investors that "the strong growth in AI Mode queries had an impact because of the lower monetization we are seeing in AI Mode," as quoted by Adweek. In plain terms, Google says monetization in AI Mode is currently lower, even as people use it more. Schindler also pointed to foreign exchange and a one-off dip in ad spend in Asia-Pacific.
Google's answer is to put more ads into the new format. Schindler said the company is "scaling high-quality ads within AI overviews in AI mode to more users and queries" and expanding ads in AI Mode into international markets, alongside multi-turn ads and AI Mode in the U.S. He said click-through rates for sponsored product listings in AI Mode are comparable to organic listings. That is Google's own early read, not an independent measurement. The company has not named the new markets in the sources we reviewed, so we cannot say yet whether India is included.
Two more figures from the call show the shift in user behaviour. CEO Sundar Pichai said queries in AI Mode are on average three times longer than traditional searches, and one in five AI Mode searches globally uses voice, images or documents.
What it means for founders and marketers: paid search is moving from a list of links to a conversation. Brands that rely on Google ads will see new formats inside AI answers, and the price and results of those formats are still unproven. Treat early performance claims as Google's, and test with small budgets before shifting spend.
Sources: Alphabet Q3 2026 earnings release (SEC exhibit 99.1); Google CEO remarks, 28 October 2026; TechCrunch, 28 October 2026; Adweek; CNBC.
