Google says it is testing new ad formats in search results and AI Mode, including Conversational Discovery ads, Highlighted Answers, and AI-powered Shopping ads
Google is introducing a new generation of Gemini-powered ad formats across AI Mode and Search designed to make ads feel more conversational …
Context & Ripple Effects
Google’s ad-product arc has moved from using generative AI to help advertisers create Search campaigns in 2023 and a Gemini-based campaign tool beta in 2024 toward ads embedded in AI Mode itself. Related coverage in early 2026 also tied Gemini to personalized purchase offers and shopping features.
That makes these tests consequential beyond new creative units: they extend Google’s established Search advertising business into conversational and transaction-oriented surfaces, where the path from query to recommendation can be less visibly separated into conventional result-page modules.
First-order effects
- Advertisers in the tests gain new Gemini-mediated placements for discovery, answer-oriented messaging, and shopping; Google gains additional formats to evaluate inside Search and AI Mode.
- Users of those surfaces may encounter commercial recommendations and shopping prompts within conversational flows rather than only alongside traditional search results.
Second-order effects
- Advertisers and merchants will need to adapt product feeds, creative, and measurement practices to formats shaped by conversational context, not just keywords and standard result-page positions.
- Google’s effort to connect AI Mode and Gemini with shopping raises the value of commerce integrations and could increase pressure on retail and marketplace partners to make inventory actionable in Google’s AI experiences.
Third-order effects
- If these formats scale, search advertising is likely to shift from selling discrete query-result placements toward monetizing AI-assisted journeys that combine discovery, answers, and purchase intent.
- The durable challenge will be preserving useful distinctions between paid recommendations and AI-generated assistance; the related coverage establishes testing and personalization, but not yet how users, advertisers, or regulators will respond at scale.
The trend: Google is turning Gemini from an advertising-production aid into a monetization layer embedded across AI-driven search and shopping journeys.