Google announced new AI-powered ad formats at Google I/O, bringing conversational advertising directly into search results. The company revealed that Gemini-powered ads will appear in AI Mode responses, marking a significant shift toward intelligent advertising within Google's core search product. All new formats will carry clear "sponsored" labeling.

Two initial formats debut in AI Mode: Conversational Discovery Ads that answer specific user questions, and highlighted answers that insert sponsored recommendations into AI-generated lists. When users query for language apps, for instance, Duolingo could appear as a sponsored entry in the recommendations.

AI-Powered Shopping Ads target major purchases like refrigerators and TVs, with Gemini crafting custom product explanations. Business Agent for Leads introduces smart brand chatbots within search ads, letting users interact directly with company representatives. Direct Offers expands to include personalized bundles, coupons, and travel deals with built-in checkout.

These AI ad formats represent Google's strategy to monetize its AI-driven search transformation while maintaining transparency. By embedding sponsored content naturally within conversational responses, Google aims to preserve user experience while creating new revenue streams from its substantial investment in generative AI technology.