The question every digital marketer has been asking just got answered.

Can businesses advertise inside AI-generated search results?

According to new findings from search intelligence platform Adthena, the answer is yes. Google has quietly begun testing ads directly inside its AI Overviews, marking what could be the biggest shift in search advertising since Google Ads launched over two decades ago.

What Was Discovered

Adthena monitored 25,000 Google search results pages and found 13 instances where ads appeared inside AI Overview modules. That's only a 0.052% frequency, but it's the first independent proof that Google is monetizing its AI search features. All detected placements appeared on desktop searches in the United States, positioned directly beneath the AI-generated summary.

The ads looked similar to traditional Google text ads but included an important addition. Each featured a thumbnail image alongside the standard blue headline, description text, and "Sponsored" label. This hybrid format combines the simplicity of text ads with the visual appeal of Shopping listings.

Headlines averaged 55 characters. Descriptions came in around 85 characters. The detected ads spanned multiple industries including education, consumer electronics, retail, telecommunications, and healthcare, suggesting Google is testing the format across various business types.

We Saw This Coming

At Digital Marketing Charlotte, we've been predicting this development for months. The business model for AI search platforms simply doesn't work without advertising revenue. Every major AI chatbot and search platform currently operates at a loss. The computational costs are massive. Processing queries through AI models requires enormous server infrastructure and electricity.

Companies like Google and OpenAI are subsidizing these AI tools. User subscriptions don't cover expenses. Google's AI Overviews are free, which means they're losing money on every query. This isn't sustainable long-term.

Historically, platforms offering free search services survive through advertising. Google became a trillion-dollar company by selling ads next to search results. Without monetizing through business advertising, AI platforms would need to charge consumers hundreds of dollars monthly. That business model won't work in the real world.

Many AI companies have denied plans to sell ads in their platforms. We never believed it. The economics demand it. Now we're seeing the first proof.

What This Means for Small Businesses

Right now, this development doesn't require immediate action from Charlotte business owners. The frequency is too low to impact current performance. You can't log into Google Ads today and specifically target AI Overview placements. That feature doesn't exist yet.

Google is clearly in early testing mode. The advertisers whose ads appeared probably didn't even know they were running in AI Overviews. Their automated Performance Max campaigns likely matched the right criteria at the right time.

Performance Max: Google's AI-driven campaign type that automatically distributes ads across all Google channels, using machine learning to optimize performance.

However, smart business owners should start thinking about AI visibility now. The trajectory is clear. Google will expand this test. More ads will appear in more AI Overviews. Eventually, this becomes a standard placement option. The businesses that understand this shift early will have a competitive advantage over those who wait.

The Bigger Picture

This finding signals more than just a new ad format. It represents the beginning of a fundamental transformation in search advertising. For over two decades, the model has been stable. User types query. Search engine shows results. Ads appear above and beside organic listings.

AI search changes everything. Now the search engine answers queries directly. Users get information without clicking through to websites. This disrupts traditional traffic patterns. For advertisers, it creates both challenges and opportunities.

The challenge is obvious. If AI answers satisfy user intent immediately, there's less reason to click ads. But the opportunity is equally significant. Ads inside AI results could capture higher-intent users who are further along the buying journey.

Adthena's broader research found that AI Overviews can reduce traditional paid search click-through rates by 8 to 12 percentage points. That's roughly a 20 to 40 percent relative decline. As AI answers take up more screen space, fewer users scroll down to regular ad placements.

Click-Through Rate: The percentage of people who see your ad and actually click on it, a key metric for measuring ad engagement and relevance.

What Charlotte Businesses Should Do

Don't panic, but don't ignore this either. The smart move is informed preparation. Start by auditing your current Google Ads setup. If you're not running Performance Max campaigns, consider testing them. They're likely the gateway to AI Overview placements.

Improve your ad creative quality. The ads detected in this study featured compelling headlines and relevant images. Generic, low-effort ads probably won't make the cut as Google expands the program. Invest in better photography. Write headlines that grab attention.

Think about your overall digital marketing mix. If AI Overviews reduce traffic from both organic and paid search, where else can you reach customers? Social media, email marketing, and content marketing on your own platforms become more important. Diversification protects you when any single channel changes dramatically.

Most importantly, stay informed. This situation is evolving rapidly. What's true today might be outdated in three months. Work with marketing professionals who monitor these trends and adjust strategies accordingly.

The Bottom Line

This isn't the end of search advertising. It's evolution. The fundamental principle remains the same. Businesses pay to get in front of potential customers at the exact moment they're searching for solutions. The format changes, but human buying behavior stays consistent.

Charlotte business owners who embrace this shift instead of fighting it will find opportunities their competitors miss. Early movers always have an advantage. By the time everyone else catches on, you'll already have data and experience that newcomers lack.

Learn More

Want a deeper dive into what these AI search changes mean for your specific business? Digital Marketing Charlotte has published a comprehensive analysis covering strategy implications, technical details, and actionable recommendations for small business owners.

Read the full article at digitalclt.com/blog/ppc-blogs/google-ads-ai-overviews-charlotte/ or contact Digital Marketing Charlotte directly to discuss how these developments might affect your digital marketing strategy.

About Digital Marketing Charlotte Digital Marketing Charlotte is a full-service digital marketing agency specializing in SEO, PPC advertising, web design, and marketing consulting for small businesses and local service companies throughout the Carolinas. Contact our team today if you want to learn more about how you can grow your business through digital marketing!