By Patrick Coffee
Google has begun testing several new ad formats in both standard search results and its AI Mode as the race to turn artificial intelligence into ad revenue picks up.
Researchers predict that Instagram and Facebook parent Meta Platforms may soon surpass Google as the world's largest seller of digital advertising thanks in large part to the increased automation of campaign creation and distribution. OpenAI meanwhile has been testing ads in ChatGPT since February.
But the companies are trying to be careful not to alienate generative AI users, who may have different expectations for responses to their prompts than they do for simpler search terms. OpenAI rival Anthropic has already attacked the ChatGPT ads test with a Super Bowl commercial.
"In a world where AI provides a direct and conversational response, will users still find value in ads?" said Shashi Thakur, vice president and general manager of Google search ads and ads on Google experiences. "Our answer is, it's definitely yes, but you have to rethink how to approach ads and what an ad is."
The U.S. rollout comes one day after Google introduced other AI products such as a personal agent called Gemini Spark and the video-creation tool Gemini Omni.
AI-generated ads for brands and products will now appear below the responses to some users' prompts in AI Mode, according to Thakur, who oversaw the development of the new products. The company's so-called "direct offers" ads for discounted products will also expand from AI Mode to standard search results.
For now, the ads will not appear in Gemini, the company's large language model app. But they may represent the next step in that direction, according to Michael Nathanson, senior research analyst at the research firm MoffettNathanson.
"They just have been deliberately trying to get the right AI products in front of you," Nathanson said, referring to Google's expanding suite of search tools. "And now comes the monetization phase of it all."
Google at the moment is focused on AI Mode, Chief Business Officer Philipp Schindler said on the company's most recent earnings call when Nathanson asked about bringing ads to Gemini.
"But it's fair to say that we really believe a format that works well in AI mode would transfer successfully to Gemini app," Schindler said.
Google has expanded the direct offers format since its introduction earlier this year to include hotels and other travel providers as well as a "bundle" feature combining several deals from the same retailer in a single ad.
For its new, more elaborate "conversational discovery" format, Google uses Gemini to create ads based on users' prompts by drawing text and imagery from brands' websites and marketing materials.
More specific "highlighted answer" ads include product explanations also generated by Gemini from a company's own materials.
Each ad format will be labeled with the word "sponsored," a Google spokeswoman said.
Google has also begun testing new formats in traditional search results. AI-powered shopping ads again explain products, while a "business agent for leads" tool lets users ask questions about a business or product within an ad itself.
The ads are designed to reach consumers at different points in the progression from their initial searches to ultimately making purchases, Thakur said. Conversational ads introduce them to brands they may not otherwise know, for example, while direct offers may show up when users ask to see products at certain price points, he said.
Gemini's reliance on a brand's own content when generating the ads may reinforce marketers' growing focus on designing that material specifically for LLM searches, sometimes with the help of proliferating "answer engine optimization" startups. Advertisers will not have full control over the final copy or imagery, but they can use a tool called AI Brief to emphasize or remove certain phrases. A brand may, for example, tell Gemini not to describe its products as "low cost," Google said.
Google will protect the ads against AI hallucinations, or false information, with "very strong guardrails," said Thakur, who declined to elaborate.
Meta's sustained growth and OpenAI's entry into the ad market leave Google little choice but to quickly introduce ads in Gemini, said Paul Armstrong, founder of tech and data consulting firm TBD Group and author of the newsletter "What Did Google Do This Week?"
At the same time, the company must move cautiously to avoid incurring the wrath of ad-averse users who see LLM responses as a final destination for their queries rather than a guide to other online resources, said Armstrong.
"Google spent 20 years training users to tolerate ads because search still felt useful," he said. "Once ads start blending into [AI] generated responses, users stop feeling like they are searching and start feeling like they are being handled."
Write to Patrick Coffee at patrick.coffee@wsj.com
(END) Dow Jones Newswires
May 20, 2026 12:00 ET (16:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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