Google turns AI Mode into an ad engine

45

TL;DR:

Google is testing AI Mode ad formats and agentic commerce tools, pushing search advertising closer to AI-led discovery, shopping and measurement.

Article:

Google used Google Marketing Live 2026 to push advertising deeper into AI Search, announcing new AI Mode ad formats, agentic commerce tools and expanded measurement features for marketers.

The move matters because Google is turning AI-powered search from a discovery layer into a commercial layer. Ads will not just sit beside results; they could appear inside AI-assisted recommendations, product explanations and shopping journeys.

The company is testing two AI Mode ad formats in the US: Conversational Discovery ads, which tailor creative to a user’s search, and Highlighted Answers, which place relevant ads within AI Mode recommendations. Google is also adding AI-generated product explainers through Gemini for some shopping ads.

Google is also expanding Business Agent for Leads, now in open beta in English. The tool lets users click a chat button inside an ad and ask questions answered from a brand’s own website. For retailers, Direct Offers will let advertisers surface discounts, coupons and bundled promotions, while Google’s Universal Commerce Protocol will support checkout features for participating merchants.

Dan Taylor, Google’s VP of global ads, framed the shift as a move “from marketing automation to marketing intelligence,” adding that AI is moving from “potential into its everyday reality.”

The measurement pitch is equally important. Google said Meridian, its open-source marketing mix model, is coming to Google Analytics 360, giving marketers more first-party data signals and forecasting tools.

For brands, the upside is faster campaign setup and more context-rich ads. The risk is dependence: as AI Mode becomes a gatekeeper for discovery, marketers may gain automation while losing some visibility into how choices are made.