Google’s new AI Mode has significant implications for the advertising industry. As AI-generated answers increasingly replace traditional search listings, brands are facing a sharp decline in click-through rates and a noticeable reduction in paid search spending.
Instead of directing users to sponsored links, AI Mode delivers instant, conversational answers within the search results page itself. This shift means fewer users are clicking through to websites, undermining one of digital advertising’s core mechanics: the paid click. Advertisers are responding by pulling back spend, as the value of top search positions diminishes in this AI-first interface.
Early data from brands and agencies shows a double-digit drop in search-driven traffic, alongside a reallocation of budgets toward more immersive, upper-funnel channels like video, audio, and branded content. While AI Mode offers a more streamlined user experience, it’s also disrupting the traditional search monetisation model on which Google—and many advertisers—have long relied.
AI Mode follows the launch of AI Overviews last year, disrupting the SEO landscape and causing concern for publishers whose content appears in AI answers, negating the need for users to clickthrough, as well as pushing organic search results further down the page. AI Mode is designed to answer more complex search queries in a more “intuitive” way with multi-part questions and follow-ups. Google said that it is intended for exploratory questions and for more complicated tasks like comparing products, planning a trip or how-tos. The tech giant claimed that early users of AI Mode are asking questions two or three times the length of traditional search queries.
In Google’s blog post announcing AI Mode, it said it will continue to evolve the search experience and that with AI Overviews, it claims users are visiting a greater diversity of websites for help with more complex questions.
“When people click from search result pages with AI Overviews, these clicks are higher quality for websites — meaning users are more likely to spend more time on the sites they visit,” it said.
