Google is testing a new advertising format inside Search AI Mode that could reshape how commercial messages appear in AI driven search experiences. The initiative, called Direct Offers, introduces personalised ads directly into Gemini powered search conversations, reflecting Google’s broader effort to adapt its core advertising business to an era where AI answers are replacing traditional lists of links.
The move matters for the MarTech and advertising ecosystem because it signals a shift away from the long standing sponsored link model that has underpinned Google Search revenue for decades. Instead of placing ads at the top of results pages, Direct Offers are designed to surface only when Google’s AI determines a user is close to making a purchase decision. This approach aims to align advertising more closely with real time user intent rather than broad keyword targeting.
According to Google, the Direct Offers pilot is part of a series of advertising experiments within Search AI Mode. The company says ads will appear selectively, based on conversational context, rather than being shown automatically for every relevant query. For example, when a user searches for a modern rug that is durable and easy to clean for frequent hosting, Search already highlights products that meet those criteria. With Direct Offers enabled, retailers can also present a targeted discount at the moment the AI believes the shopper is ready to decide.
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The timing of these ads is controlled entirely by AI signals. Google emphasises that Direct Offers are meant to appear later in the journey, when a discount could genuinely help a shopper choose, rather than interrupting early stage research. This reflects Google’s attempt to balance user experience with monetisation as search evolves into a more conversational interface.
Several retailers are already participating in early testing. Google confirmed that brands including Petco, e.l.f. Cosmetics, Samsonite, and Rugs USA are part of the pilot. Merchants using Shopify are also among the first groups gaining access, which could accelerate adoption among mid market and enterprise retailers that already rely on Shopify for ecommerce operations.
From an execution standpoint, retailers configure Direct Offers within their existing campaign settings by defining the discounts they want to promote. Google’s AI then determines when and where those offers appear during a Gemini powered search conversation. In the initial phase, the pilot is limited to discounts only, but Google has indicated that this will expand over time.
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Future versions of Direct Offers are expected to support incentives beyond price reductions. Google has said potential additions include free shipping, bundled products, and other value based attributes. The goal is to allow shoppers to prioritise overall value rather than cost alone, while giving advertisers more flexibility in how they present promotions within AI search experiences.
The experiment also highlights growing competitive pressure in AI powered discovery. With platforms like OpenAI and others pushing conversational interfaces that bypass traditional search results, Google faces increasing urgency to ensure its advertising model remains effective. Embedding ads more naturally into AI conversations could help preserve revenue while adapting to changing user behaviour.
At the same time, the approach raises questions around transparency and trust. As ads become part of AI generated responses rather than clearly separated placements, Google will need to ensure users can distinguish commercial content from organic answers. How well Direct Offers manages that balance will likely determine whether the format expands beyond limited testing and becomes a core part of Google Search AI Mode.
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