Ads in AI Search: Why It Matters, Where They Show, and What You Should (and Shouldn’t) Do

When Google’s AI Mode rolled out in the UK on 28 July 2025 and Microsoft continued expanding Copilot ad features, the paid media buzz turned into a cautious stare. Ads now appear in AI-generated experiences AI Overviews, AI Mode, and Copilot with brands showing up sometimes without even knowing it.

This post breaks down what’s actually happening, early US insights, how your ads fit in, and what you should do if you're running campaigns in this new AI-driven landscape.

💡 Spoiler alert: you don’t need to panic - but you do need to strategise carefully.

What’s actually happening?

AI-generated search layers Google AI Overviews, AI Mode, and Microsoft Copilot are now becoming monetised zones. These experiences aim to answer questions directly on the SERP or via conversation, and advertisers can now appear within, above, or beneath them.

What used to be ad-free is evolving fast.

How Big Is This Really?

A Semrush-backed study of 10M+ keywords found AI Overviews now trigger on 13.14% of US desktop searches, up from 6.49% in January 2025. (Source - Search Engine Land)

Sounds impressive, but let’s keep it real:

• That stat is desktop-only and most searches happen on mobile.

• Mobile still drives 60–70%+ of all search traffic.

• AI Overviews appear way less on mobile, likely due to UX constraints and a slower rollout.

  
  

Also worth noting: 12.4% of AI Overviews now rank below position 1. So yes, your trusty organic or paid listings might still sit at the top.

AI isn’t eating the SERP - yet.

Google Ads in AI Overviews (SGE)

If you’re using Performance Max, AI Max, or broad match, your ads may now appear:

• Above the AI Overview

• Within the AI Overview

• Below the AI Overview

  
  

This has been active since May 2025, as confirmed by Google’s announcement.

No opt-in. No opt-out. If your setup qualifies and the query triggers an AI Overview, congrats, you're in the mix.

These tend to appear for vague, research-heavy questions, not straightforward product intent ones like “buy blackout curtains”.

💡 Important note: Even if you’re not eligible for AI Overview placements (e.g. you're using exact or phrase match), your ads can still show on the same SERP above or below the AI box. Google hasn’t killed off traditional placements, it’s just layered something new on top.

So yes, traditional Search campaigns still work. But if you want your ad actually in the AI Overview, you’ll need broad match, AI Max, or PMax.

AI Mode: Conversational Search and the Rise of Big Headlines

AI Mode is Google’s new conversational search tab and it officially landed in the UK in July 2025.

It behaves differently:

• Prompts are 2–3× longer than standard search queries.

• Users ask deeper, more open-ended questions.

And the ads?

• Eligible if you use Performance Max, AI Max, or broad match + smart bidding.

• Headlines tend to be longer, pulled in dynamically via Final URL expansion (think H1s, blog titles).

• Formats look more native and what’s pulled in depends on what Google can grab from your site.

We’re seeing blog posts and guide-style content surface in ads, often because Final URL expansion is switched on and Google’s looking for any signal it can to match intent. This isn't always a clever strategy, it’s sometimes just the algorithm doing what it does to spend your budget.

And yes, this is super early days, ad formatting, placements, and even visibility are all still shifting while the system learns. What you see today may look very different in a few months.

This makes sense: AI Mode isn’t for “buy it now” queries. It’s more:

• “Where to go for a relaxing UK spa weekend”

• “How to decorate a rental property without painting”

• “Why goose down is better for winter duvets”

  
  

💡 Pro tip: Check your landing page report. If you're seeing random blogs surface, you may want to tighten up your Final URL settings or consider testing pages with more top-of-funnel content, think FAQs, how-to articles, or buyer’s guides, especially if you’re in travel, wellness, home or service-based industries.

AI Overviews vs AI Mode: what’s the difference?

It’s more than just layout:

• AI Overviews = inline boxes on the SERP

• AI Mode = a separate conversational tab

  
  

But here’s where it gets interesting, the content sourcing looks different, too.

• AI Overviews often pull from forums like Reddit, Wikipedia, and large publishers. That means your brand might be discussed… but your own site doesn’t always get cited.

• AI Mode seems to favour brand-owned content, blogs, buying guides, service pages, likely because of how it's designed to support multi-turn exploration.

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According to BrightEdge:

• Brands appear in 90% of AI Mode responses, with 3.8× more unique brand mentions

• In contrast, only 43% of AI Overviews show brand presence and that’s far less predictable

  
  

So if you’re hoping to control the narrative, AI Mode might be your best bet… for now.

Microsoft Ads in Copilot

Meanwhile, Microsoft is quietly doing a better job:

• Copilot supports Search, Shopping, PMax, and Multimedia Ads

• CTRs are 2× higher than standard Bing search

• No special setup needed, just be running eligible campaigns

They’ve also enabled impression-based remarketing, but there’s a big caveat for UK/EU:

• Users must have visited your site and opted in via Consent Mode

• If they haven’t? No list. No targeting. No dice.

  
  

What does this mean for advertisers?

Let’s break it down, properly.

✅ Upside

• Existing campaigns may already be eligible

• AI placements give visibility during early search moments

• Less competition (for now) means cheaper exposure

⚠️ Downsides

• You have zero control over where or how your ads appear

• Broad match + smart bidding is mandatory, no room for exact match purists

• Final URL expansion can overwrite your crafted ad copy with blog headlines

• No reporting - you won’t know if traffic came from AI unless you catch it live

• You can’t opt out of AI placements

• You’re flying blind on search queries up to 60% are hidden behind "Other search terms"

Remember the days of “Women’s clothing > Womenware > Red dresses” and spotting eBay? Yeah, those insights are long gone.

Today, you’re handing over the wheel and Google’s driving, blindfolded.

What to do next

1. Run an AI eligibility check

Use incognito to test core queries. If you don’t see AI Overviews or AI Mode, you likely won’t show ads there.

Try:

• “Best boutique hotels in Edinburgh UK”

• “Cost of physiotherapy session London”

• “Eco-friendly home storage UK”

2. Use broad match, but only with solid data

AI placements require broad match, but only when you're feeding the system reliable signals. That means:

• Strong conversion tracking

• Enough conversions (30+ over past 30 days) for smart bidding

• Careful tuning and monitoring of search terms

Launch in a tightly controlled ad group with high-intent queries and smart bidding. Test, monitor and adjust continuously.

3. Fix your content

If Google’s going to pull from your page, make that page shine.

Focus on:

• How-to blogs

• Guides and FAQs

• Content that actually answers questions

Salesy product pages won’t cut it here.

4. Understand remarketing limitations

Microsoft lets you remarket off impressions (if consented). Google doesn’t (yet).

In the UK, impression-based lists only work if:

• User visited your site

• Opted into tracking

  
  

Otherwise? No remarketing magic for you.

5. Watch for weird signals

Keep an eye out for:

• Long ad headlines that don’t match your RSAs

• CTR dips or CPC spikes

• Strange queries surfacing in your “Other terms” bucket

It might be AI, it might not. But stay alert.

🔹 Final thoughts

Ads are no longer just about keywords and placements, you’re now bidding for visibility inside AI experiences.

Google’s AI Mode is live in the UK. Microsoft Copilot is pushing hard. And we’re all figuring out what it means in real time.

This isn’t a call to panic or pivot. It’s a reminder to check where your campaigns are showing, understand the limitations, and test thoughtfully.

And if you're not sure where to start, that’s exactly the sort of work I do with clients at 4M Digital.

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4M Digital is a paid media consultancy specialising in Google Ads, Microsoft Ads, and Paid Social campaigns. With over 15 years of expertise, we help businesses unlock the full potential of their digital advertising strategies through tailored management, audits, and training.