Google announced on Tuesday that it will begin testing advertisements within its AI-generated search responses in the United States. This initiative follows the recent widespread release of the AI Overviews feature, which was showcased at the company's annual I/O conference.
The ads will be displayed in a 'sponsored' section of the AI Overview, with their placement determined by the relevance and content of the user's search query, as detailed in a blog post by Google.
Why Is Google Planning To Show Ads?
This move is part of Google’s strategy to expand its influence beyond traditional search advertising into the realm of generative AI. By incorporating AI into its search engine, the tech giant aims to enhance its ad sales, which remain a critical revenue stream. Google's advertising revenue saw a 13 per cent increase, amounting to $61.7 billion in the first quarter ending March 31.
Google indicated that it will continue to experiment with and refine new ad formats, seeking feedback from advertisers throughout the process.
Pichai Defends AI Overview
In a related development, Google CEO Sundar Pichai addressed concerns from independent news websites and publishers regarding the newly launched AI Overviews feature. During an interview with Nilay Patel from The Verge, Pichai responded to the issues raised after the feature's announcement at the Google I/O 2024 developer conference on May 14.
Pichai highlighted that internal data suggests the AI Overviews feature enhances user engagement and click-through rates, though he did not provide specific metrics. He reiterated Google's commitment to meeting the needs of both users and content creators.
"Users are looking for high-quality content," Pichai stated. "The interesting aspect is that it’s not a zero-sum game. People have responded very positively to AI Overviews. It's one of the most favourable changes in Search based on our metrics. People engage with the content provided and often click through to more detailed information. When we include content and links within AI Overviews, they achieve higher click-through rates than content placed outside of AI Overviews."
Addressing the notion that Google's AI features are drawing traffic away from independent sites, Pichai argued that traffic reductions are more frequently caused by aggregators. "Ironically, sometimes our adjustments actually increase traffic to smaller sites. The sites that often voice complaints are typically the aggregators," Pichai noted.