Google Tests Conversational Discovery Ads in AI Mode

Google is testing Gemini-built ad formats inside AI Mode for the first time, with the model writing the ad creative itself in response to each Search query. The two formats in testing, Conversational Discovery ads and Highlighted Answers, were released today at Google Marketing Live alongside two more formats coming to Search in the next few months and an expansion of the Direct Offers pilot.

Conversational Discovery Ads

Google says Conversational Discovery Ads use Gemini to build ad creative tailored to a specific Search query, rather than serving a static asset created in advance. This means Google is turning ads into something that is generated in real time based on what a person searches for, instead of showing a fixed ad that was designed earlier.

Advertisers normally create ads in advance. That could be a headline, image, video, and description. Then Google shows that same pre-made ad to different people, even if their search queries are slightly different.

With Conversational Discovery Ads, Google is saying the ad is no longer fully pre-built. Instead, its AI system, powered by Gemini, reads the user’s search query and then generates or assembles the ad creative on the spot to match that exact intent.

Each ad runs alongside an independent AI explainer that Gemini writes from product or service information separate from the advertiser's own creative. Google says the explainer is intended to add transparency by making the synthesized context visible to the user. Both elements continue to be labelled "Sponsored." The format is currently in testing inside AI Mode.

Highlighted Answers

Highlighted Answers extends the same architecture to AI Mode's list-style responses. When AI Mode returns a list of recommendations, for example a list of language apps for an upcoming trip, ads are eligible to appear inside that list as a Highlighted Answer. The format is in testing, according to Google.

AI-Powered Shopping Ads

AI-powered Shopping ads are coming to Search in the next few months. Google says a user enters a shopping-related query, Gemini then pulls the most relevant products from advertisers’ inventory data that already exists within Google’s shopping ecosystem.

After that, the system generates a short explainer that highlights why a specific product may be relevant to the search. This means advertisers’ product listings are not just displayed as static results, but are paired with AI-generated context tied to the query.

Business Agent for Leads

Google is also launching Business Agent for Leads that embeds a Gemini-powered chat agent directly inside a Search ad. Instead of filling out a static lead form, a user can click "Chat" and ask questions in the ad surface itself. The agent uses the advertiser's website as its information source.

Direct Offers Expansion

The company is also expanding the Direct Offers pilot it launched in January. The pilot is gaining promotion bundling, where brands upload discounts, giveaways, and local coupons alongside eligible products and guardrails, and Gemini uses AI Brief to construct a tailored deal per query.

Native checkout is being added for Universal Commerce Protocol merchants, letting shoppers complete purchases inside the offer. A travel expansion will let Booking and Expedia surface offers inside AI-assisted trip planning. Direct Offers will also begin surfacing naturally inside AI Mode responses.

Campaign Setup Requirements

To run the new formats, campaigns need to be built on AI Max for Search, AI Max for Shopping, or Performance Max. Google replaced Dynamic Search Ads with AI Max for Search earlier this year, making it the foundation layer that most of the new Marketing Live formats now sit on.

Strategic Implication

Google, OpenAI, and Microsoft are all working out how to insert sponsored placements inside conversational AI answers without breaking user trust in the responses themselves. Microsoft has been testing in-conversation ad formats inside Copilot in Bing since late 2025, and OpenAI expanded ChatGPT shopping ads earlier this month.

Google's distinguishing pitch is the independent AI explainer, a Gemini-written context layer that sits alongside each ad and is meant to make the synthesiZed reasoning visible to the user.