Google Ramps Up Ads To Support Costly AI Search Function

As Google announced the global availability of its video search function powered by AI, the company is also starting a wide rollout of ads that will be displayed within and alongside the AI-generated summaries appearing at the top of some search results.

The move is designed to show investors that costly artificial intelligence projects can generate revenue.

Google’s AI powered search functions are still free, although media reports from earlier this year hinted that the company was considering charging for some “premium” generative AI task functions.

Google reported $175 billion (A$255.5 billion) in revenue from search and related ads last year, more than half its total sales. It will be keen to integrate the latest AI innovations into its search functions, though not at the expense of it cutting down on its profits.

Some investors are also concerned that generative AI, the tech that underpins Google’s AI summaries, could cannibalize its search business.

The company said in May that it would start testing ads in the search summaries, called AI Overviews.

Sponsored panels placed above, below and within the summaries have begun suggesting products related to the search query.

At a demonstration for reporters held ahead of the announcement, searching “How do I get a grass stain out of jeans?” yielded AI-generated instructions followed by ads for Tide and OxiClean laundry products, reported Bloomberg.

Google places its AI Overviews, which summarize the contents of search results, at the top of the page for some queries.

Google will not share ad revenue with publishers whose material is cited in AI Overviews, said a company spokesperson.

The company said that it will start adding inline links to sources used in AI-generated summaries, and initial tests reportedly showed these links sent more traffic to websites compared to the old design with links at the bottom, said Rhiannon Bell, Google Search’s vice president of user experience.

As Google ramps up its ad presence, it is also under pressure from the US Justice Department to prove that it does not have an unfair advantage over its competitors in the search and advertising tech market.

A US judge has already alleged that Google is a monopolist in the search engine space. A separate judge is now considering whether Google has also developed a monopoly in the advertising technology space by blocking out competitors. That trial wrapped up late last month and the judge is expected to deliver a decision before the end of this year.