AI-powered search ads: a treasure trove of opportunities (and risks) for brands

AI-powered search advertising opens up a vast myriad of opportunities for brands, but it also brings many risks.

AI-powered searches are becoming increasingly ubiquitous and are resulting in significant changes in how internet users gather information online. For now, AI searches are diminishing the relevance of traditional search engines and also putting advertisers and media outlets in a difficult position.

Since AI responds directly to user queries, users often don’t feel the need to click on anything (which ultimately translates into a significant decrease in web traffic for brands and media outlets). The rate of searches that end with zero clicks (when AI is involved) is between 45% and 70%. The good news is that when users decide to click on links associated with AI search results, they are probably very interested in the product they have previously taken the trouble to search for, and their click is therefore of high quality (which ultimately represents a great opportunity for brands that choose to break into this type of context).

AI-powered search is already becoming a platform for advertising (although advertisers are rather cautious).

Advertising in AI search is still in its infancy. In the United States, Perplexity is currently experimenting with advertising formats in its AI-powered search engine: ads that appear alongside results and ads that pop up within follow-up questions.

Across the Atlantic, Google also began rolling out ads in its AI Overviews last October, initially only on mobile devices, and later, in May 2025, also on desktop devices. This service will soon debut in non-English-speaking markets as well.

Furthermore, last May Google launched «AI Mode,» a new search experience that allows users to tackle more complex queries, and advertising has also begun to appear in this format, which debuted in our country about a month ago.

In «AI Mode,» ads appear within and below the responses provided to user queries. Even so, advertisers seem to be even more skeptical about advertising in «AI Mode» because they fear their brand safety could be compromised by linking ads to potentially erroneous answers (something that is entirely possible).

ChatGPT, probably the most widely used AI tool globally, is currently free of advertising. This is not the case with Copilot, Microsoft’s AI tool, where so-called «showroom ads» are currently appearing in searches conducted within this channel.

What seems clear is that advertising is destined to eventually find its way into AI tools, which are currently exploring alternative revenue streams to subscriptions to fund their very expensive AI projects.

In AI-powered search, brands have much to gain and much to lose.

From an advertiser’s perspective, advertising in AI search is a double-edged sword. While this emerging channel seems incredibly promising at first glance, it also carries many potential risks. For now, it’s not entirely clear whether users readily accept commercial messages in an environment as conversational as AI. However, if they miss the boat on advertising in AI search (which is potentially very disruptive), brands risk losing relevance in an environment where consumers are often very close to making purchasing decisions and are therefore at the bottom of the sales funnel.

Even so, in such a deeply contextual environment as AI, it’s also very easy for commercial messages shown to consumers to miss the mark (and thus put advertisers hiding behind these types of messages in a difficult position). If there are flaws in the ads that appear in AI search, not only does the advertiser’s image suffer, but so does the image of the tool that hosts those ads. And in a particularly dynamic context like AI search, where the context is often difficult to predict, flaws surface more easily.

The inherent risks of advertising in AI search explain the caution with which most brands are approaching this format. However, brands that overcome these potential risks and invest in this channel also have much to gain by being pioneers in a format that is practically unexplored until now. Investing in such a new channel as AI search, however, brings with it another risk (which is by no means insignificant): the lack of data needed to successfully launch a campaign. In an environment where there are still few advertisers and therefore little data, algorithms are eventually less diligent in anointing their campaigns with the desired effectiveness (and this can ultimately undermine the quality of advertisers’ decisions).

Source: www.marketingdirecto.com