Ads Inside AI Mode: How Google Search Is Changing the Rules of PPC | Revelar Solutions

 Search behavior is changing faster than most advertisers realize. People are no longer typing short, keyword-style queries and scanning ten blue links. Increasingly, they are asking Google detailed, conversational questions and getting synthesized answers back through AI Mode. Google has confirmed that 75% of people report making faster, more confident decisions when using AI Mode in Search, and the company is now building an entirely new advertising layer to sit inside that experience.

At Google Marketing Live 2026, held on May 20, Google announced two new ad formats built specifically for this shift: Conversational Discovery ads and Highlighted Answers. Both run inside AI Mode itself, both are powered by Gemini, and both signal a real structural change in how PPC will work going forward. As a google ads agency that tracks platform shifts closely for our clients, we broke down exactly what these formats are, how they work, and what advertisers need to do to prepare.

What Is AI Mode and Why Does It Matter for Ads?

AI Mode is Google's conversational search experience, where instead of a traditional results page, users get a synthesized answer generated by Gemini, often based on a multi-step, exploratory conversation rather than a single query. Google confirmed at its I/O event that AI Mode had already surpassed one billion monthly active users, which explains why the company is moving quickly to build a monetization layer around it.

Until now, ads inside AI-generated experiences were largely limited to appearing above, below, or within AI Overviews, using the existing Search and Shopping ad auction. The new formats announced in May 2026 go a step further, embedding sponsored content directly inside the conversational answer and recommendation flow itself.

Conversational Discovery Ads: Ads Built in Real Time

The first new format, Conversational Discovery ads, changes something fundamental about how ad creative works. Traditionally, an advertiser writes headlines and descriptions in advance, and Google decides when to show that fixed asset. With Conversational Discovery ads, the creative itself is generated by Gemini at the moment of the search, tailored to the specific phrasing of a person's question.

Google's own example illustrates this well: someone searching for low-maintenance ways to make their home smell like a spa or a rainy forest would see an ad built specifically around that mood and requirement, rather than a generic fragrance ad. Each Conversational Discovery ad appears alongside an independent AI-written explainer, a separate layer of Gemini-generated context about the product, displayed next to the advertiser's own creative to help the user evaluate the fit. Both the ad and the explainer carry a clear "Sponsored" label.

This format targets long, exploratory prompts rather than short, high-intent keywords, which means the old playbook of writing a handful of exact-match headlines becomes far less relevant. What matters instead is the quality and depth of the product data and landing page content Gemini has to draw from.

Highlighted Answers: Getting Into the Recommendation List

The second format, Highlighted Answers, works differently. When AI Mode generates a list-style response, such as recommending the best language-learning apps before a trip, a relevant, high-quality ad becomes eligible to appear directly within that list. It is not placed beside the answer; it becomes part of the answer itself, while still carrying the required sponsored label.

For advertisers, this creates visibility much earlier in a customer's research journey, before they have narrowed down to a final decision. Instead of waiting for someone to search a specific product name, brands now have a chance to be recommended during the exploratory phase of a purchase decision.

How This Differs From Ads in AI Overviews

It is worth being precise here, since these are genuinely different things. Ads in AI Overviews already exist and follow the standard auction system, showing above, below, or within the AI-generated overview using existing Search, Shopping, and Performance Max inventory. Conversational Discovery ads and Highlighted Answers are new formats built specifically for AI Mode's more conversational, multi-turn experience, and as of mid-2026 they remain in testing rather than broadly available.

Understanding this distinction matters for any google adwords agency advising clients right now  recommending budget shifts based on formats that are still in limited testing would be premature, but preparing account structure and creative assets ahead of a wider rollout is a smart, low-risk move.

What Advertisers Cannot Do (Yet)

One detail that surprises a lot of advertisers: you cannot manually create a Conversational Discovery ad or a Highlighted Answer. Google generates both formats automatically, based on the assets, product feed data, and campaign signals an advertiser has already provided. This places these new formats firmly in the same automation category as Performance Max and AI Max, where advertisers supply raw materials and Google's AI decides the final assembly.

According to Google's own guidance, advertisers running AI Max for Search, AI Max for Shopping, and Performance Max campaigns are the ones most likely to become eligible for these new placements as they roll out further. If your account structure is still built entirely around traditional, manually controlled Search campaigns, this is a strong signal to start testing AI Max now rather than waiting.

Why This Changes the Rules of PPC Strategy

For over a decade, PPC strategy has been built around keyword research, exact match control, and carefully written ad copy. These new formats push a good part of that value further upstream, toward product data quality, asset diversity, and how well your brand already shows up in Google's understanding of your business.

This is a meaningful shift for any google ads agency near me managing client accounts, because the skills that matter most are changing. Feeding Gemini clean, detailed product information through Merchant Center, building a wide range of creative assets, and strengthening landing pages for exploratory, conversational intent are becoming just as important as traditional keyword and bid management.

Google has also confirmed it is testing healthcare ads inside AI Mode, limited to U.S. advertisers running English-language queries so far, using the same eligible campaign types: Performance Max, AI Max with search term matching, Shopping campaigns, and broad match campaigns. Given healthcare is one of Google's most tightly regulated ad categories, this suggests a broader rollout across other industries is likely a matter of timing rather than a real question of if.

How Businesses Should Prepare

Rather than waiting for these formats to reach general availability, there are practical steps worth taking now:

• Audit your Merchant Center product feed for completeness, since Gemini draws directly from this data to build ad creative
• Build a genuinely diverse set of creative assets, since static, narrow creative gives Gemini little to work with
• Strengthen landing pages for longer, exploratory search intent, not just single-keyword landing pages
• Ensure AI Max for Search and Performance Max are already active and performing well, since eligibility for new AI Mode formats depends on this foundation

Choosing the Right Partner for This Transition

As google ppc ads management shifts toward a more automated, AI-generated model, the value of working with an experienced team goes up rather than down. Businesses researching the best google ads agency in india should be asking prospective partners specifically how they are preparing client accounts for AI Mode advertising, not just how they manage traditional Search campaigns.

At Revelar Solutions, we treat these platform shifts as something to prepare for methodically  auditing product data, testing AI Max, and building the creative foundation that Google's AI needs to generate strong, relevant ads inside these new experiences. Our goal is to make sure our clients are ready before these formats become mainstream, not scrambling to catch up after competitors already are.

Frequently Asked Questions

Can I create a Conversational Discovery ad or Highlighted Answer manually? No. Both formats are generated automatically by Google's Gemini models based on your existing campaign assets and product data. Advertisers cannot write or design these ads directly the way they would a standard responsive search ad.

Are these new ad formats available to all advertisers right now? Not yet. As of mid-2026, Conversational Discovery ads and Highlighted Answers are being tested within AI Mode, primarily in the U.S. on mobile and desktop. Broader availability has not been confirmed.

Do I need to change my whole campaign structure to become eligible? 

You do not need to overhaul everything immediately, but eligibility is closely tied to running AI Max for Search, AI Max for Shopping, and Performance Max campaigns. Accounts relying solely on traditional manual Search campaigns are less likely to qualify as these formats expand.

Will these ads look different from regular search ads to users? 

Yes, in placement and format. They appear inside the AI Mode conversation or recommendation list itself, alongside a Gemini-written explainer, rather than as a separate ad block beside search results. Both formats are still clearly labeled "Sponsored."

Is this the same as advertising in AI Overviews?

No. Ads in AI Overviews already exist and use the standard auction system, appearing above, below, or within the overview. Conversational Discovery ads and Highlighted Answers are separate, newer formats built specifically for the more conversational AI Mode experience.

How can a small or mid-sized business prepare for this shift without a huge budget? 

Start with the fundamentals that cost time rather than large ad spend: clean up your product feed data, diversify your existing creative assets, and make sure your landing pages answer exploratory questions clearly. These improvements benefit your account regardless of when new AI Mode formats become widely available.