Google Explores AI Ads, US Authorities Seek Breakup
Google is exploring new ways to integrate ads into its AI-generated search answers, potentially boosting ad margins and responding to evolving search behaviors. Meanwhile, US authorities are seeking to break up Google's ad technology division due to growing market dominance.
Google is adapting to changing search habits, with over 60% of shopping queries now using broad, conversational terms. AI-generated answers, which can handle such queries better than traditional link lists, are becoming more prevalent. Google is trialing ads within these AI answers, such as displaying plumbing service ads when solving water pressure issues.
The tech giant is also planning to introduce personalized ads in its upcoming 'AI Mode' for generated answers. Additionally, Google has launched AI Max, a one-click function for search campaigns, now in beta worldwide. The company could further escalate ad integration by including paid text links directly in the answer text.
Google's integration of ads into AI-generated answers could increase production costs but may also lead to higher conversion rates. The DOJ's lawsuit aims to restore competition and transparency in the digital advertising market by breaking up Google's ad technology division.
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