Google Expands AI Search Ads to International Markets as Core Search Growth Slows
Google is expanding ads in AI Mode beyond the U.S. as Search ad growth slowed to 12% in Q3, from 17% in Q2 and 19% in Q1. Alphabet reported $127.6 billion in revenue, while shares fell 8%.
Google announced in October 2026 that it is bringing ads within its AI-powered Search experiences to international markets, expanding a monetization push that the company hopes will offset decelerating growth in its traditional search advertising business.
The announcement came Wednesday during Alphabet’s third-quarter earnings call, where the company reported $127.6 billion in revenue — up 25% year over year. Despite the headline growth, Google Search advertising revenue increased just 12% year over year in Q3, down from 17% in Q2 and 19% in Q1. Alphabet shares fell 8% following the results.
“We are now scaling high-quality ads within AI overviews in AI mode to more users and queries,” said Philipp Schindler, Google’s chief business officer. “This includes taking our monetization footprint global for the first time. Today, we’re announcing the expansion of ads in AI mode into international markets alongside multi-turn ads and AI mode in the U.S.”
Google reports early signs that the formats are performing. Click-through rates for sponsored product listings in AI Mode are already comparable to those for organic listings, according to Schindler, and the company’s user research indicates people find the ads relevant. The expansion builds on new Gemini-powered ad formats announced in May, including conversational discovery ads and sponsored recommendations integrated into AI-generated answers.
CEO Sundar Pichai said Search queries grew at their fastest year-over-year rate in five years, crediting AI features with driving longer and more complex searches. Queries in AI Mode average three times the length of traditional searches, and one in five AI Mode searches globally involves voice, images, or documents. Google has also surpassed 50 billion visual searches per month.
Alphabet’s Google Services division generated $96.3 billion in revenue, up 11% year over year, while Google Cloud revenue surged 103% to $30.7 billion. The quarter also saw the release of Gemini 4 Argon, the Gemini app reaching one billion monthly users, and the launch of the Pixel 11 lineup.