How Google is adapting its traditional search ads for AI Mode and AI Overviews, with Google’s Dan Taylor

“We are certainly far beyond those days,” said Dan Taylor, vp of global ads at Google, on the latest Digiday Podcast episode. “I’ve been at Google for 19 years, and as the ways that people search has evolved, Google has evolved search along with it. And we think that AI Overviews and AI Mode and these generative AI-driven experiences are a pretty transformational change.”

Which requires a corresponding change to how Google incorporates ads into search results (or whatever the right term is for these new AI-based answers). Google began inserting ads beneath AI Overviews last year, and now it has started testing ads within AI Mode. 

The latter is the much more significant change. Because AI Mode replaces the one-off search query with a conversation that can be added to and continued over time, that conceivably means that ads could be added to the conversation and updated as it goes on. 

“Being able to have an ongoing conversation and understand the context of the queries that came before it will be part of the user experience and thus can also inform the advertising experience that comes with it,” Taylor said.

Here are a few highlights from the conversation, which have been edited for length and clarity.

How ads will be incorporated into AI Overviews and AI Mode

Ads will continue to be clearly identified, clearly delineated. In terms of how that looks in terms of actual visual representation, I have no idea how that will evolve over time. But our core principle will be to make sure that they’re clearly identified and separate from what we call organic content.

How AI Overview and AI Mode ads are being priced

They’re the same pricing models that we have historically had in Google Ads. There’s cost-per-click. We also offer the opportunity to buy on a cost-per-acquisition basis, focus on a target return on ad spend and multiple other models.

How keyword-based buying is changing

Keyword-based planning just is not a durable way to approach [more conversational search behaviors], which is why we really leaned into launching AI Max for Search campaigns, which gives advertisers the opportunity to power their search campaigns with AI as these search experiences evolve, enabling them to show up against queries that are relevant to their business, not just the queries that are on their keyword list.

WTF is Smart Bidding Exploration?

Smart Bidding Exploration combines an AI-powered predictive model with a loosened return on ad spend target. It gives the algorithm the freedom to bid opportunistically or, in some terms, higher on queries that might be a little bit more difficult to win but also might result in the return on ad spend that you’re requiring.