Google Search Ad Growth Slows as AI Search Faces Monetization Test

At a glance

Google's search ad growth slowed sharply in the third quarter, while Meta's ad sales grew much faster. Investors are worried that AI search may be taking users away from regular search results, and that AI answers are not yet attractive to advertisers.

Key points

• Google search ad revenue grew 12% in the third quarter, down from 19% in the first quarter and 17% in the second.
• Meta's ad revenue rose 26% to $63.1 billion, a gap of 14 percentage points that CNBC called Meta's most favorable position since 2021.
• Advertisers say search ads are less effective as users shift to large language models for information.
• Google's AI Overviews and AI Mode show ads based on prompts and conversations, but advertisers cannot run separate ads for these features or opt out of them.

Why it matters

Google's ad business is a major part of the online economy, so whether AI search can make money affects advertisers, investors, and how people find information.

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