Google Is Now Selling Ads Inside AI Mode in Australia. Is Your Brand in the Answer?

What actually changed on 28 October

Google announced it is scaling ads in AI Mode to ten new countries, with Australia first on the list. The ads carry a "Sponsored" label and sit inside the written answer, next to the products and brands Google recommends on its own.

There is no new campaign type to set up. Google's own help page says existing Search, Shopping and Performance Max campaigns are eligible to serve in AI Mode and AI Overviews. Advertisers also can't opt out. You can't target AI Mode on its own, and you can't exclude it separately from regular Search.

The results don't get their own report either. Google folds AI Mode performance into your standard campaign totals, so you can't see how much of your spend went there or what it returned.

In the US, Google has gone a step further with "multiturn" ads, which can appear on a shopper's follow-up questions as well as the first one. That format hasn't reached Australia yet. Every AI ad format so far has launched in the US first and reached Australia later, so expect it.

The short list just got shorter

A normal Google results page has room for a lot of brands. Organic results, a row of Shopping ads, more ads at the bottom. If you weren't first, you could still be fourth or seventh and get the click.

AI Mode doesn't work like that. Google says queries in AI Mode are about three times longer than traditional searches. People ask full questions like "best waterproof hiking boots for wide feet under $300", and they get a written answer with a handful of products in it.

Google also says click-through rates are "already similar" between sponsored and organic product listings inside AI Mode. That figure comes from two weeks of Google's own US data in August and September, so treat it with care. If it holds, a paid product tile and a free recommendation sit in the same short list and get clicked about as often as each other.

For a $5M to $100M brand, the maths has changed. A shopper used to scroll past your competitors to find you. Now they read a short answer, and there may only be room for four or five names. Some of those spots are being sold.

Australia's biggest retailers got in first

This isn't Google's first move into AI shopping in Australia. In June, Australia became the first Asia-Pacific market for Google's Universal Commerce Protocol, the standard that lets shoppers buy inside Google Search, AI Mode and the Gemini app without visiting the retailer's site. The first retailers named were Kogan, Bunnings, THE ICONIC, Adore Beauty and Petbarn.

Google built the protocol with Shopify, and the same checkout is now reaching Shopify brands, starting with eligible US merchants. Australia's largest retailers, with dedicated teams and big ad budgets, set up first. Most mid-sized brands haven't looked yet.

Put June and October together. The big players can be named in the AI Mode answer, sell inside it, and now pay for an extra sponsored spot next to it. Mid-sized brands are competing for whatever room is left.

Your shoppers are already asking AI first

None of this would matter if Australians weren't using AI to shop. They are.

• 83% of Australians surveyed by Manhattan Associates had used an AI assistant such as ChatGPT, Gemini or Copilot for shopping research, and 36% do it regularly.
• Six in ten Australian online shoppers use AI tools when shopping, and 75% of 18 to 39 year olds do, according to IAB Australia and Pureprofile.
• 78% of shoppers who use AI read the AI summary for a quick answer before they click through to a website.
• Google says AI Mode queries have doubled every quarter since launch.

The 78% figure is the one I'd pay attention to. Shoppers make the shortlist inside the AI answer. A shopper reads it, picks two or three names and only then visits a website. If your brand isn't in that first answer, the rest of your marketing never gets a look in.

Paying for a slot won't make AI recommend you

The ads rollout makes it tempting to treat AI Mode as another media buy. Turn the campaign on and you're in the answer. You're in the sponsored tile, and that's all.

The free part of the answer, where Google's AI names the brands it actually recommends, runs on different signals. The AI looks at your product data, what reviews and other sites say about you, and how clearly your brand matches the problem the shopper described. We've written about why ChatGPT recommends your competitor instead of you, and the same logic applies inside Google.

That's why the ads launch widens the gap. A brand AI already names can buy a sponsored spot too and show up twice. A brand AI doesn't name can only pay to appear, and it pays every time. As AI Mode takes a bigger share of searches, you end up paying more and more for a spot your competitor gets for free.

Ad budgets were already under pressure as AI Overviews cut organic click-through rates. Paying to get into AI answers on top of that is an expensive habit to fall into without deciding to.

What to be sceptical of

Two things deserve caution.

First, the numbers Google is using to sell this. The "similar click-through rate" claim is two weeks of Google's own US data, and nobody outside Google has checked it. Australian advertisers can't check it either, because AI Mode results only show up inside campaign totals. Be wary of anyone who claims to know what AI Mode ads are returning for Australian brands right now. No one outside Google can see that number yet.

Second, the real cost of getting named for free. There's no switch for it. Becoming the brand AI recommends for your category takes months of steady AEO work, on your own site and in the places AI reads about you. If someone promises it by next week, walk away. The brands that started early are already months ahead, which is why waiting costs you.

Find out where you stand first

Before you decide whether to spend more on AI Mode, check whether AI already names you. Most brands we talk to haven't. Our State of AI Visibility report found big gaps between the brands shoppers know and the brands AI recommends. A well-known name doesn't get picked by default.

Found, our free AI visibility ranking, shows whether AI assistants name your brand in your category and which competitors they name instead. If you're missing, or a competitor keeps beating you, that's the gap our AI search service for ecommerce brands and Lift are built to close. You can book a call to talk it through.

The bottom line

Google has started selling space inside the answer. Australia's biggest retailers are already in it, and now they can buy more of it.

For everyone else, the question has changed. It used to be whether you rank on Google. Now it's whether Google names you when a shopper asks, and if it doesn't, how long you're willing to pay to be there anyway.

Google is writing the shortlist either way. Know whether you're on it.