Why Ads Are Focused on AI Search and Not Gemini

For those eager for AI chatbots to emerge as a prime advertising space, patience is necessary. Google's Gemini app, currently enjoying a surge in popularity, had sparked rumors in the advertising world about potential ad incorporation. Such speculation, however, is unfounded according to Dan Taylor, Google's VP of global ads. In a recent discussion with Business Insider, Taylor emphasized that there are no intentions to incorporate ads into the Gemini app for the time being.

Google is focusing its advertising strategies on AI-backed search tools instead. The introduction of ads has commenced with AI Overviews—textual summaries that appear at the forefront of Google's search results, launched in 2024—and extends to AI Mode, Google's chatbot on search pages, facilitating comprehensive inquiries and further exploration.

The Role of Search Versus Gemini

Taylor clarifies the distinct objectives of Search and Gemini: while both leverage AI, their applications differ. 'Search serves as a digital gateway for discovering information, often linked to commercial interests such as products or services,' Taylor explains. 'Conversely, Gemini functions as an AI aide, aiding users in evaluation, creation, and task completion.'

Navigating the Advertisement Frontier

Advertising via AI is a relatively new venture with numerous uncertainties, particularly around optimal display conditions, formats, and monetization strategies. A key challenge lies in balancing promotional content with the need to offer unbiased and accurate information, ensuring users' trust remains unshaken while competitive pressures loom large from rivals like OpenAI's ChatGPT.

Although advertising might seem inevitable given the substantial investments in AI technology, premature actions could seem to compromise product quality, risking user discontent. Google's track record in deriving profit from its search offerings affords it a tactical advantage over competitors like OpenAI, potentially allowing Google to postpone implementing an ad framework for Gemini.

Insights from Google's AI Search Advertising Trials

Taylor shared that over 80% of Google's advertisers have integrated AI-enhanced tools into their operations, utilizing AI-algorithms to recommend optimal ad placement and creative choices. Specific decision-making regarding ad placement in AI Mode or Overviews is automated based on targeting criteria such as location, demographics, and keywords.

Despite the advanced integration of ads in AI Overviews, the transition to AI Mode is still evolving, posing unique challenges. Extended interactions in AI Mode necessitate cautious ad placements to avoid perceptions of intrusiveness, which could disrupt trust. Ads shown prematurely, such as a newbie athlete prematurely encountering ads for running gear, can undermine user experience.

Recently, Google has piloted a new ad approach—Direct Offers—aimed at presenting custom discounts within AI Mode, though rollout details remain limited. Alongside this, other advancements in AI-commerce have been proposed, such as a checkout option within AI interfaces, including Gemini, enabling streamlined shopping experiences.