Google says its AI-powered ads help some brands lift online sales by 80%

Q&A // April 7, 2026 Google says its AI-powered ads help some brands lift online sales by 80% By Allison Smith Ivy Liu Google says its AI-powered ad tools are delivering measurable results for some brands, as the world’s largest seller of ads experiments with new ad formats, shopping integrations and AI-powered tools.

The debut of ChatGPT in late 2022 sparked early speculation that AI chatbots were tantamount to “Google killers,” threatening the company’s main business, Search, which drives about 60% of parent company Alphabet’s revenue. But those fears have yet to materialize. In 2025, Google generated more than $400 billion in revenue for the first time.

Ad revenue totaled $82. 28 billion in the fourth quarter, up 13. 5% year over year. YouTube ad revenue rose nearly 9% to $11. 38 billion. Google is now testing how advertising fits into its AI search products, including AI Mode, its Gemini-powered search product. The company began rolling out ads within AI Mode last year.

Google is also testing tools that allow brands to shape how they appear inside AI search. A new “business agent” feature lets retailers customize how product questions are answered in their own brand voice, with early adopters including Poshmark and Reebok. Google is also testing new ad formats built for how people shop through AI search.

One pilot program, called “direct offers,” allows brands to present personalized promotions to shoppers who show signs of purchase intent within AI Mode. Using Google’s Gemini models, the system analyzes conversational context and user behavior to determine when a promotion may be most relevant.

As part of its broader commerce push, Google introduced the Universal Commerce Protocol earlier this year, developed with Shopify, which lets U. S. brands enable purchases directly within AI conversations. Google is not alone in trying to figure out how ads will work in AI search.

Companies including Amazon and OpenAI are also experimenting with ads in AI search. Results so far have been underwhelming. A year and a half after AI startup Perplexity introduced ads, the company began phasing them out.

Amazon’s sponsored prompts inside its shopping assistant Rufus are reportedly generating limited traffic compared to traditional Amazon ads, according to The Information.

To learn more about how AI is influencing Google’s advertising strategy, Modern Retail spoke with Courtney Rose, vp of retail at Google Ads, at Shoptalk Spring about early results from AI-powered campaigns, how marketers are adapting and what comes next. This interview has been edited for length and clarity.

The term “Google killers” has been bandied about with the rise of LLMs, but the strength of Google Search and its ads business suggests the company remains resilient. How is AI impacting Google’s ads business? “Search is not some zero-sum game. Everything we have seen in the last few years is that search is in this expansionary moment.

When I’m walking through Vegas and I see somebody’s purse that I like, I can take a picture of that and immediately search for it. A lot of the searches we see now in AI mode and in Gemini are two to three times longer than a traditional search. My last search — I counted it this morning — was 45 words long.

Instead of just searching for ‘blue cashmere sweater,’ I’m speaking into my phone and saying, ‘I’m going to Atlanta, it’s in the spring, I don’t know what the weather’s going to be, I don’t want to be too hot in my sweater, I’m probably going to need a purse too, I want to wear it with jeans.’

It means that Google is able to understand so much more of my intent: where I am as a consumer, what I care about, the location I’m going to. We’re able to match that intent in a much richer way than we were for just ‘blue cashmere sweater.’

It enables all of this discoverability for merchants and brands on what they want to surface and how they want to match in that way. From an ads experience, we try to make that really, really easy for advertisers.

When you use AI products like AI Max or Performance Max, you’re able to surface across all of these experiences for the consumer, including AI mode, traditional search and formats like Demand Gen on YouTube, because the system understands your products and creative and matches them to rich, conversational intent.”

What have you learned so far from testing ads in AI Mode? “We’re seeing great performance. Aritzia uses AI Max, and that means that they’re able to surface in these various search experiences, including AI mode. When they enabled AI Max, they saw a 80% increase in revenue.

What AI Max does is it goes onto the retailer’s site and understands what is on their site, and it looks at all of their ads and their creative assets, so we understand what it is they’re selling and what they want to sell — they might prioritize some products over others. That’s