Google AI Mode adds local retailer ads as Search growth slows to 12%
Google is showing more shopping ads in some AI Mode answers. The change comes after Alphabet, Google’s parent company, said that Search revenue growth slowed to 12% in the third quarter of 2026. It also said AI Mode queries were growing quickly but earning less money than searches on Google’s traditional results page.
Screenshots posted on November 12 by SEO consultant Glenn Gabe show the new ads in an answer about FootJoy golf shoes. The answer included a block marked Sponsored, with four shoe listings described as options from local retailers. Each listing showed a sale price and a store name. Two also displayed location pins for shops in Fairless Hills and Langhorne, Pennsylvania.
Clicking a Google product listing opened a product panel with another paid section, headed Sponsored stores. It included offers from DICK’S Sporting Goods and Carls Golfland. This means a shopper could see paid retailer listings under an AI answer and again inside the product panel.
The sources shown with the answer were Google product pages, rather than links to the retailers’ own websites. The product panel also included images and tools to choose a size or color and track the price.
More ads in one shopping conversation
The screenshots show two kinds of sponsored shopping placements for one golf shoe search. Another analyst, Juozas Kaziukėnas, said he had seen four types of sponsored placements in a single AI Mode response: a sponsored retailer in search results, a sponsored store in a product panel, a sponsored product in a product list, and ads below the answer.
These examples show that ads may appear at several points in an AI shopping conversation. However, the screenshots do not show how often this happens. Google had not publicly commented on them at the time of writing.
Some of the ad formats are not new. Google announced shopping ads in AI Mode in February 2026, and Gabe spotted sponsored stores in a product panel in March. Google has also said it is testing local inventory ads in AI-powered search experiences. The latest screenshots suggest that local-style retailer listings may now appear beneath some AI answers, though two of the four products shown did not have location pins.
Why the timing matters
On October 28, Alphabet reported that Google Search and other revenue rose 12% in the third quarter, to $63.35 billion. That was slower growth than in the first two quarters of 2026, when it was 19% and 17%.
At the same time, Google said search activity was strong. CEO Sundar Pichai said the company’s year-over-year query growth was the fastest in five years. He also said AI Mode queries were, on average, three times longer than traditional searches.
Google business chief Philipp Schindler said the growth in AI Mode queries had affected revenue because AI Mode was earning less than traditional Search. He said Google was expanding ads in AI Overviews and AI Mode to more users and more queries.
That makes the new shopping placements consistent with Google’s stated plan. But the screenshots do not prove that the company introduced these specific ads in response to its latest results. Some of the formats existed before the earnings announcement, and Alphabet has not shared how much revenue AI Mode earns.
What it means for advertisers and shoppers
Google says existing Search, Shopping and Performance Max campaigns can appear in AI Mode. Advertisers cannot separately opt out of AI Mode, and results are reported together with other Search activity. That may make it harder for businesses to tell how their ads perform specifically in AI Mode.
For shoppers, sponsored listings can offer prices and nearby sellers. But they also take up space in an answer that may still be asking what kind of product the user wants. In the golf shoe example, the assistant had asked about size, width and shoe style before showing four products.
The key question is whether more ads will help Google earn more from AI Mode without making the experience less useful. Alphabet has not published figures on AI Mode revenue or how often ads appear in its answers. Its fourth-quarter results, expected in early 2027, may offer a clearer picture of how the strategy is working.
