Google Ad Growth Slows to 10.5% as AI Mode Ads Expand to 10 Countries

Alphabet, Google's parent company, reported Q3 earnings on October 28: total revenue rose 25% year over year to $127.6 billion, but ad revenue growth slowed to 10.5%, PPC Land reported. Search ad revenue reached $63.4 billion, with growth slowing to 12% from 17% the prior quarter, and total ad revenue missed the market estimate of $83.5 billion. Alphabet shares fell about 7% in after-hours trading, later dropping more than 11%.

Google's chief business officer Philipp Schindler said "the strong growth in AI Mode queries had an impact," while adding the company feels good about its overall trajectory. CEO Sundar Pichai called the quarter one where the company reached "a half-trillion dollar revenue run rate." Schindler also cited currency effects and temporary pullbacks by Asia-Pacific advertisers as factors behind the slowdown.

The same day, Google announced AI Mode ads will expand to 10 additional countries: Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines, and Singapore. Brazil, Mexico, and the UK will follow during Q4, and the US will get a new "multiturn ads" format that appears as users continue a conversation. Google said these ads carry a "Sponsored" label when they appear in response to follow-up queries.

AI Mode queries average three times longer than standard searches, Google said, suggesting users are asking more specific, conversational questions. CFO Anat Ashkenazi said AI investments are driving "the highest query growth in half a decade." Google also noted that AI Mode pages show fewer ads than a conventional results page.

Google claimed click-through rates for product-listing ads in AI Mode are already similar to standard search, though Search Engine Roundtable's Barry Schwartz questioned whether the same holds for text-link ads. Performance may vary by ad format. AI Mode ads have been running since May 2025, and this expansion significantly widens their reach.

Source: PPC Land, October 29, 2026. Checked October 29, 2026. Read the original