Google admits AI Mode searches make less money than traditional search
Surging AI Mode queries weighed on Google's search revenue in the third quarter, while paid clicks rose 8% and cost per click climbed 4%.
Google told investors on October 28 that queries in AI Mode generate less revenue than traditional searches. The admission came from Philipp Schindler, senior vice president and chief business officer at Alphabet, during the company's third quarter 2026 earnings call. That same day, Google Search's data science team told advertisers that people are coming to Google earlier and earlier in the buying journey.
Put those two statements together and you have the starting point for a column published by Search Engine Journal on November 9. The piece weighs the numbers Google released and suggests adjustments for anyone running paid search campaigns.
The quarter by the numbers
Revenue from Google Search and other came to $63.35 billion in the third quarter of 2026, up 12% year over year, after growth of 19% in the first quarter and 17% in the second. Compared with the second quarter, which brought in $63.27 billion, the result was nearly flat. Paid clicks grew 8%, down from 13% in each of the two previous quarters, and cost per click rose 4%.
Google CEO Sundar Pichai said query growth was the strongest in five years, including for commercial queries. When JPMorgan's Doug Anmuth asked why queries are growing faster than revenue, Schindler pointed first to currency and then to AI Mode: “The strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode.” He added that “the majority of AI Mode queries are incremental, creating more monetization opportunities over time.”
Longer questions, asked earlier
On the Ads Decoded podcast, hosted by Ginny Marvin, Shivani Mohan, vice president of Data Science and User Experience Research for Google Search, described “an expansionary moment.” According to Mohan, “people are asking much longer, much more detailed questions,” and queries are moving up the funnel, with more exploratory questions about entire categories.
Google's report on AI Mode, based on U.S. data from May 2026, says these queries are on average three times longer than traditional searches. Pichai said that “one in five AI Mode searches worldwide uses voice, images or documents.”
Google still does not disclose how ads perform in AI Mode. The only indicator offered by Shashi Thakur, vice president and general manager of Search Ads, is that click-through rates are already similar for sponsored and organic items in AI Mode product listings, based on internal data from August 20 to September 3, 2026. The company has announced ads in AI Mode follow-up questions in the United States.
What changes for brand marketers
Ads in AI Mode and AI Overviews are matched to both the query and the content of the AI response, and only broad match or keywordless targeting can appear inside the summary. People comparing products, Mohan said, want reviews, podcasts and videos from people in a similar situation, which calls for pages with comparisons, pricing and use cases. In the column's view, reach in AI Mode should be treated as a test, with its own budget and its own success metric.
Key questions
Why does AI Mode earn less for Google?
According to Alphabet's Philipp Schindler, monetization in AI Mode is lower, and the strong growth in those queries weighed on search revenue in the third quarter of 2026.
Do ads in AI Mode perform well?
Google does not disclose paid clicks or cost per click for AI Mode. The only data point is a similar click-through rate for sponsored and organic items, measured internally over two weeks.
Which campaigns can appear inside AI Overviews?
Only broad match keywords or keywordless targeting, such as AI Max for Search, Performance Max, Shopping and Dynamic Search Ads.
Source: Search Engine Journal.