As AI-powered search capabilities from Google, Microsoft, and others continue to evolve, marketers are asking a critical question: Are paid ads becoming less valuable with AI search?
It’s a valid concern. Search engines are rapidly deploying AI to provide immediate answers through features like Google’s AI Overviews and Gemini, which transform how users interact with search results—and by extension, with the paid ads that traditionally commanded prime real estate on those pages.
But the reality is more complex. While some metrics suggest diminishing returns, others reveal new opportunities, such as better ad targeting and bidding. Let’s dive into what the data actually tells us about paid advertising in the era of AI search.
Key Takeaways
- Paid ads are experiencing significant challenges with AI search as features like Google’s AI Overviews have led to a 34.5% lower average click-through rate and cases where no ads appear alongside AI-generated answers.
- AI creates a paradoxical effect on advertising by simultaneously disrupting traditional ad visibility while offering new optimization tools that can increase conversions by up to 14% at a similar cost per acquisition.
- Hybrid approaches combining AI automation with human expertise show the most promise, with case studies demonstrating up to 50% increases in return on ad spend when implementing this balanced strategy.
- Diversification of ad formats is crucial as traditional search ads face visibility challenges, making shopping ads, video ads, and discovery campaigns increasingly important alternatives.
- The value of paid ads with AI search isn’t diminishing but transforming, shifting from metrics like click-through rates toward enhanced conversion quality, improved targeting precision, and automation efficiencies.
TABLE OF CONTENTS:
How AI Search Is Transforming the SERP
AI search goes beyond traditional keyword matching to understand user intent and deliver information directly in search results. Features like Google’s AI Overviews provide comprehensive answers without requiring users to click through to websites.
This evolution represents a significant shift from the traditional search paradigm, where users would scan results and click on links—often including paid ads—to find what they’re looking for.
“We’re witnessing the most significant transformation in search behavior since the introduction of mobile. AI search is fundamentally changing how users consume information and interact with paid advertising.” – Eric Siu, CEO of Single Grain
The implications for advertisers are profound. When users can get answers directly on the search results page, the traditional paid search model, built on the premise of attracting clicks to external websites, faces challenges.
The Data: Declining Metrics for Paid Search
Recent research reveals concerning trends for advertisers in the AI search.
| Metric | Impact with AI Search | Source |
|---|---|---|
| Click-Through Rate (CTR) | 34.5% lower average CTR when AI Overview present | Basis Technologies (2025) |
| Ad Visibility | In some cases, no ads appear alongside AI overviews | Seer Interactive (2025) |
| Overall Traffic | Up to 60% projected decrease in organic traffic | Industry Expert Projection |
These statistics paint a concerning picture. When AI-generated answers satisfy user queries directly within search results, both organic listings and paid ads suffer from reduced visibility and engagement.
Real-World Impact: The Mail Online Case Study
The effects of AI search are already impacting major publishers and advertisers. According to Digiday, Mail Online experienced a dramatic decrease in search traffic and paid ad click-through rates following the launch of Google’s AI Overviews.
The publisher reported a staggering 56% drop in click-through rates, as AI-generated answers directly satisfied user queries within search results. Even more telling, data showed that 80% of consumers now resolve 40% of their searches without leaving the search engine results page—a troubling trend for businesses relying on both organic and paid traffic.
This case illustrates how AI search can severely diminish the visibility and effectiveness of paid advertisements, forcing even established publishers to reevaluate their digital strategies.
The Paradox: AI Also Enhances Ad Performance
While AI search creates challenges for advertisers, AI-powered optimization tools are simultaneously providing new opportunities to enhance ad performance. This creates an interesting paradox: the same technology disrupting the advertising landscape is also offering solutions.
Google’s recently launched “AI Max” for Search campaigns exemplifies this dynamic. According to Google, advertisers using AI Max achieved a 14% increase in conversions or conversion value at similar cost-per-acquisition (CPA) or return on ad spend (ROAS).
Campaigns using exact and phrase keywords saw even more dramatic improvements, with a performance uplift of up to 27%. These results suggest that while AI search may reduce raw click volumes, it can simultaneously improve the quality and conversion potential of the traffic that does click through.
Leveraging AI-powered targeting, creative enhancements, and dynamic adjustments to ad delivery can help advertisers mitigate some of the negative impacts of AI search on traditional metrics.
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Hybrid Approaches: Human Expertise Plus AI Optimization
The most promising path forward appears to be a hybrid approach that combines AI automation with human strategic oversight. This approach recognizes that while AI tools can optimize campaigns at scale, human expertise remains essential for strategy, creativity, and contextual understanding.
Fashion retailer Cosabella provides an instructive example. According to DashoContent, the brand implemented a hybrid AI approach for paid search, blending AI-driven optimization for bidding, targeting, and creative testing with human oversight for strategic adjustments.
The results were impressive:
- 50% increase in return on ad spend (ROAS).
- 12% decrease in overall ad spend.
- Improved efficiency and effectiveness across paid search campaigns.
This case demonstrates that advertisers can thrive in the AI search era by adopting a balanced approach that leverages both technological capabilities and human insight.
Adaptation Strategies for Marketers
41% of users trust AI search more than paid results. This means that advertisers must adapt their campaigns to fit new demands. Here are practical approaches to consider.
Diversify Ad Placements and Formats
With traditional search ads facing visibility challenges, diversification becomes crucial. Expand beyond standard text ads to include:
- Shopping ads: These visual formats remain prominent in AI-enhanced search results.
- Video ads: As search becomes more visual, video advertising gains importance.
- Discovery campaigns: Reach users when they’re exploring content across Google properties.
- GIFs: Simple animated images that are fun and engaging.
Leverage AI Optimization Tools
Since AI prioritizes relevance over ad dollars, advertisers must utilize optimization tools to display their ads above organic results. Counter AI’s disruptive effects by using its capabilities to your advantage:
- Implement AI-driven media buying to improve targeting precision.
- Use responsive search ads with multiple headlines and descriptions to maximize relevance.
- Adopt automated bidding strategies tailored to specific business goals.
Focus on High-Intent Commercial Queries
AI search systems often prioritize informational queries, making commercial-intent searches more valuable for advertisers:
- Allocate more budget to bottom-funnel keywords with clear purchase intent.
- Develop specialized landing pages that efficiently convert this high-intent traffic.
- Utilize audience targeting to reach users who have demonstrated purchase intent.
Reimagining Paid Advertising Value in the AI Era
The question isn’t simply whether paid ads are less valuable with AI search—it’s how their value is transforming. Traditional metrics like click-through rate may decline, but other value indicators are emerging:
- Enhanced conversion quality: AI can filter for higher-intent users, potentially delivering fewer but more valuable clicks.
- Improved targeting precision: AI systems can identify subtle patterns in user behavior that humans might miss.
- Automation efficiencies: Reduced management overhead through AI-driven campaign optimization.
Success not only requires tactical adjustments but a fundamental rethinking of how we measure and define advertising value. Agentic AI technologies are pushing marketers to consider more sophisticated metrics that capture the full impact of paid advertising beyond simple click rates.
The Future of Paid Advertising in an AI Search World
As we look ahead, several trends are likely to shape the evolution of paid advertising in AI search:
- Integration with AI overviews: Search engines may develop new ad formats designed specifically to complement AI-generated answers.
- Advanced attribution models: New methods will emerge to measure advertising impact in zero-click environments.
- Specialized AI strategies: Advertisers will develop approaches tailored to different AI search interfaces.
- Voice and multimodal search ads: As search becomes more conversational and visual, ad formats will evolve accordingly.
While these changes represent significant challenges, they also create opportunities for innovative marketers who can adapt quickly. The value of paid advertising—reaching potential customers with relevant offers at moments of high intent—remains valid even as AI transforms the search experience.
Are Paid Ads Less Valuable With AI Search? Adapting to the New Reality
Are paid ads less valuable with AI search? Due to AIO and other types of AI search, advertisers are facing numerous challenges. However, the value of paid ads isn’t simply decreasing—it’s evolving. Paid advertising remains a vital component of the digital marketing mix, transformed and enhanced by the very AI technologies that may appear threatening.
The examples of Google’s AI Max and Cosabella’s hybrid approach demonstrate that adaptation is not just possible but potentially profitable. Embrace AI tools for optimization while maintaining human strategic oversight. Marketers who adapt accordingly will find opportunities for growth even as search continues to transform through AI integration in search.
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FAQs
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Will AI search destroy Google Ads?
AI search is already disrupting the traditional search engine results pages (SERPs), and yes, it poses a serious threat to paid search ads (PPC) as we know them today. Since users are searching for conversational queries with voice devices, there is less emphasis on ads and sponsored results. AI Overviews and zero-click results are already decreasing website visits and organic traffic, which will also impact traffic from paid ads. That said, future predictions, such as sponsored AI results, local intent, and AI shopping, present opportunities for online advertising.
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Will AI make online advertising more affordable?
AI has the potential to make online advertising more affordable in some ways, but it depends on several factors. Advertisers can utilize AI to automate optimization, enhance targeting, allocate ad budgets more effectively, generate creatives at scale, and conduct more accurate prediction analysis. However, AI can also result in more costs, specifically from individual platforms.
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What are future predictions for AI paid advertising?
The future of AI in paid advertising is rapidly evolving. Some of the biggest trends in AI advertising include automated campaigns, conversational ads, real-time adaptive creatives, predictive targeting with first-party data, performance-based pricing models, voice and multimodal ad formats, and scalable micro-campaigns.
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