Google has introduced one of the most important changes to Shopping ads in years.
With Shopping ads now appearing inside Google’s AI Mode experience, this isn’t just another placement update. It’s a shift in how ads enter the buying journey.
This is not a new campaign type, bid strategy, or toggle in Performance Max. It’s a new ad surface embedded into Google’s AI-powered conversational experience. And unlike traditional Shopping ads, visibility here isn’t won by higher bids.
It’s earned through product quality, feed structure, and contextual relevance.
Let’s get one thing clear.
This update does not introduce a new campaign structure inside Google Ads.
You don’t create a separate “AI Mode Shopping” campaign.
Instead, Google has added a new ad surface within its AI-powered search experience, often referred to as AI Mode, where users interact and have conversations rather than typing traditional keyword queries.
This matters because it changes:
- When ads appear
- Why they appear
- Which retailers are eligible
- How performance should be measured
This is not about capturing high-intent product queries like:
- “Buy Nike Air Max size 10”
- “Best Price MacBook Pro 14 inch”
This is about discovery, comparison, and evaluation inside AI-driven conversations.
The 4 Layers of AI Mode Shopping Ads
Google’s update operates across four structural layers. Understanding these layers is critical if you want visibility.
Discovery & Intent Detection
Ads don’t appear immediately.
In AI Mode, users aren’t searching in the traditional sense.
They’re asking things like:
- “What’s the best lightweight laptop for travel and video editing?”
- “Compare breathable running shoes for hot weather.”
- “What are good gift ideas for a minimalist dad?”
These are exploratory and conversational prompts.
The system:
- Interprets intent
- Evaluates context
- Waits for comparison or evaluation signals
When AI determines that the user is in active consideration mode, Shopping ads appear.
This is a major shift from traditional Google Search where product ads can trigger immediately on transactional keywords.
Here, ads are introduced at the moment of evaluation, not initial curiosity.
Product & Merchant Matching
You’re matched to products, not keywords.
This is where the real transformation happens.
In traditional Shopping campaigns, you target:
- Product categories
- Keywords (indirectly via query matching)
- Audience
In AI Mode:
- The AI recommends products first.
- Ads are triggered from those recommended products.
- Retailers are matched to those products, not directly to the conversation.
In other words:
- The AI decides the product.
- Then the system decides the retailer.
And what determines retailer visibility?
- Feed accuracy
- Attribute completeness
- Variant structure
- Compatibility data
- Material, sizing, model detail
- Product clarity
Feed relevance and data depth now influence eligibility more than aggressive bidding.
This is why “you earn your way in.”
Placement & Experience
Ads live inside the AI Shopping flow.
Unlike traditional Shopping ads that sit above search results, AI Mode ads are embedded inside the conversational shopping experience.
Sponsored retailers appear:
- Next to AI-generated product recommendations
- Within comparison tables
- Inside multi-brand evaluation layouts
The experience is built for:
- Cross-brand comparison
- Multi-store visibility
- Feature-based evaluation
It’s less about “clicking the first product” and more about structured comparison.
This design favours retailers that:
- Offer strong differentiation
- Provide rich attribute data
- Clearly communicate value
It discourages thin feeds and generic titles.
Conversion & Direct Offers
The moment of consideration is monetised.
Google is also introducing a format called Direct Offers.
This format allows retailers to:
- Surface tailored offers
- Show value adds beyond price
- Display bundles
- Highlight loyalty benefits
- Promote extended warranties
- Present exclusive perks
These appear when users are ready to buy, not when they’re casually browsing. This moves beyond pure price competition. It enables strategic differentiation. The retailer that wins may not be the cheapest, but the one offering the most compelling overall value.
Why This Update Matters For Advertisers
This update changes:
- Where Google inserts your products
- How intent is interpreted
- How eligibility is determined
- How performance should be evaluated
AI Mode is no longer about query capture. It’s about discovery participation.
How to Operate This Update
If you treat this like standard Shopping inventory, you’ll misread performance.
Here’s how to adapt.
1. Stop Treating It as Lower-Funnel
This placement sits in mid-to-lower funnel evaluation.
It supports:
- Assisted conversions
- Incremental demand
- Comparison-stage nudges
If you judge it on last-click ROAS, you’ll undervalue it.
2. Rebuild Your Feed for Comparison Use Cases
Your feed must now support evaluation.
That means:
- Clear material differences
- Variant logic (size, color, compatibility)
- Technical specs
- Model distinctions
- Use-case clarity
Instead of: “Nike Air Max 270 – Black”
Think: “Nike Air Max 270 Men’s Running Shoe – Breathable Mesh – Size 8–12 – Road Running”
Decision factors matter more than category labels.
3. Optimise Titles for Decision Drivers
Titles and attributes should reflect:
- Performance features
- Differentiators
- Compatibility
- Use-case relevance
Not just:
Brand + Product Name + Category
AI Mode thrives on structured data that supports comparison.
4. Measure Incrementality
Look beyond:
- Last-click ROAS
- Direct conversion rate
Instead monitor:
- Assisted conversions
- Category lift
- New-to-brand impact
- Cross-device journeys
AI-driven discovery may introduce demand that converts later.
5. Segment by Category
Not all product categories benefit from AI-driven discovery.
High-impact categories may include:
- Electronics
- Home goods
- Fashion with fit considerations
- Technical products
- Gifts
Low-consideration commodities may see less lift.
Segment reporting by category to see where discovery drives incremental value.
The Strategic Implication
This is part of a broader shift.
Google is moving:
- Query matching → Intent understanding
- Keyword dominance → Contextual eligibility
- Auction-only advantage → Data-quality advantage
Retailers who rely on bid inflation will struggle.
Retailers who invest in:
- Clean feeds
- Rich attributes
- Clear differentiation
- Structured product data
Will gain disproportionate visibility.
The Bigger Picture
AI Mode Shopping ads represent something larger than a new placement.
They represent Google’s attempt to:
- Keep product discovery inside its ecosystem
- Monetise conversational search
- Blend organic AI recommendations with paid retail presence
- Redesign comparison shopping
This update disrupts where your products enter the decision journey. And in AI Mode, visibility is no longer bought first. It’s earned first, then amplified.
Need a fresh perspective? Let’s talk.
At 360 OM, we specialise in helping businesses take their marketing efforts to the next level. Our team stays on top of industry trends, uses data-informed decisions to maximise your ROI, and provides full transparency through comprehensive reports.
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