Google bets on conversational AI to drive the next phase of search advertising

Mumbai: Google says users are increasingly moving beyond keyword-based searches to longer, more conversational queries, creating new opportunities for advertisers as AI reshapes the search advertising market. The shift comes as AI-powered search is prompting technology platforms to rethink traditional search advertising.

“What we found is that with conversational search, search is becoming an even deeper tool for discovery and decision-making,” Dan Taylor, Google's global vice president of ads, told ET.

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According to PwC, the overall paid search market is projected to grow at a compound annual growth rate (CAGR) of 6.1% to $402.7 billion by 2030, while the traditional paid search segment is expected to expand at a slower 3.8% CAGR to $214.5 billion.

Taylor said AI is expanding how people use Google search, with users asking new types of questions, including longer, more complex and visual queries, instead of thinking about the right keywords.

The Google executive said conversational search is helping consumers move from discovery to purchase decisions faster by providing more informed experiences. Google processes around five trillion searches annually, with overall query volumes continuing to grow, Taylor said. About 15% of the searches Google sees every day are entirely new, reflecting changing search behaviour.

Taylor said consumers are also coming to search earlier in their journeys with broader, open-ended questions, giving advertisers an opportunity to engage potential customers earlier in the decision-making process.

According to a Google-commissioned Ipsos study, 84% of Indian users reported making faster decisions using AI Mode, while 87% said they were making more confident decisions.

AI-powered search experiences are also gaining traction. AI Overviews, Google's AI-generated summaries that appear in search results, now reach more than two billion monthly users.

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AI Mode, the company's conversational search experience, generates queries that are three times longer than traditional search queries. Google Lens, the company's visual search tool, is used more than 25 billion times every month.

Taylor said India presents a significant opportunity for conversational search as users increasingly search in regional languages, mixed-language formats and through voice. He said Google's Gemini AI model has improved its understanding of these queries, delivering more relevant search results.

Taylor said retail, travel and lead-generation businesses are among the strongest adopters, while generative AI is also reshaping how marketers create advertising campaigns.

As AI automates more of campaign execution, first-party data--or information collected directly--will become the key differentiator for advertisers, Taylor said.