Advertising Enters the Chat: Google Integrates Ads Into AI

Google has begun integrating ads into chatbot conversations, marking a significant evolution in its digital advertising strategy as generative AI reshapes how users search for information online.

According to Bloomberg, the tech giant has extended its AdSense for Search program—which traditionally places ads on third-party websites’ search results—to also appear in interactions with AI chatbots. This shift follows a series of trials conducted with AI startups such as iAsk and Liner, Bloomberg reported, citing individuals familiar with the matter.

This move comes as Google faces mounting competition from AI-driven search alternatives like OpenAI and Perplexity AI. These platforms promise faster, more conversational answers, challenging Google’s long-held dominance in online search. In response, Alphabet Inc., Google’s parent company, is ramping up efforts to maintain its leadership in advertising, which remains the company’s primary revenue engine.

Search advertising brought in over $198 billion in revenue for Google in 2024—comprising nearly 60% of Alphabet’s total sales, per Bloomberg. But as user behavior changes in response to conversational AI tools, Google is adapting by embedding ads directly into these new interfaces.

“AdSense for Search is available for websites that want to show relevant ads in their conversational AI experiences,” a Google spokesperson confirmed.

The strategy reflects broader industry experimentation with monetizing generative AI platforms. For instance, iAsk now places ads beneath AI-generated answers, often prompting users to continue the conversation after viewing sponsored content. Similarly, Koah Labs has begun working with brands to deliver advertisements tailored for chatbot users.

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While some AI startups are tapping into Google’s ad ecosystem, others are forging their own paths. Perplexity AI, according to Bloomberg, has established direct relationships with advertisers and allows them to sponsor follow-up queries on its platform. Liner, which focuses on students and research-oriented users, displays a limited number of highly relevant ads—an approach reminiscent of Google’s early days, CEO Luke Jinu Kim told Bloomberg.

“Feedback loops are incredibly important,” said Tomasz Tunguz, general partner at Theory Ventures, speaking to the importance of refining ad strategies in the evolving landscape.

Despite regulatory scrutiny and a recent federal ruling that found Alphabet violated antitrust laws in digital advertising markets, Google continues to invest in emerging ad formats. The company argues its tools remain dominant because of their effectiveness and ease of use.

As users interact more with AI-driven tools and click on fewer traditional links, the advertising landscape will likely shift further. Still, companies like Liner see opportunity in longer, more nuanced user queries, which can provide fertile ground for well-targeted ads.

With its latest expansion, Google is not only responding to the current wave of AI innovation—it’s laying the groundwork to ensure advertising remains a profitable part of that future.

Source: Bloomberg