Google Is Putting Ads Inside AI Overviews: What It Means for Your PPC Budget in 2026

Short answer: Since Google Marketing Live 2026, Search and Shopping ads now appear directly inside AI Overviews, not just around them. If your account still runs on rigid exact-match keywords, you're largely locked out of that inventory. If your budget is still allocated the way it was in 2024, you're overpaying for shrinking click volume and underpaying for the intent-based formats Google now rewards. Below is what actually changed, what it means for spend, and what we're doing differently for our clients this quarter.

What changed: ads are now inside the AI answer, not below it

For the first two years of AI Overviews, the summary box sat above the ads. Google answered the question for free, then showed ads underneath for people who kept scrolling. That's over.

Google has confirmed that Search and Shopping ads can now surface inside AI Overviews and AI Mode themselves, triggered by the AI's interpretation of intent rather than by matched keywords. A search like "how to clean an oven" can now return Shopping ads for cleaning products woven directly into the AI-generated answer, not stacked below it.

AI Mode, the more conversational layer above Overviews, has passed 1 billion monthly users, with query volume more than doubling every quarter, and AI Overviews themselves now reach roughly 2.5 billion monthly users. This isn't a beta feature on a slice of traffic. It's becoming the default way a growing share of the UK's searches get answered.

Why your click volume is already down (and it isn't your website's fault)

If you've watched organic and paid click-through rates slide over the last year, the data backs up what you're seeing. Independent studies converge on the same direction, even if the exact numbers vary by methodology:

• Position-one organic CTR falls by roughly a third to a half when an AI Overview appears on the query, according to analyses from Ahrefs and Digital Applied.
• Seer Interactive's longitudinal tracking found organic CTR on AI Overview queries dropped from 1.76% to 0.61% between mid-2024 and September 2025, with paid CTR on the same queries down 68% over the same window.
• Pew Research Center tracked close to 69,000 real searches and found users clicked through in only 8% of visits when an AI summary appeared, versus 15% without one, roughly halving click behaviour.
• Around a quarter of sessions end the moment an AI Overview appears. The user got their answer and closed the tab. That traffic didn't go to a competitor. It never left Google at all.

The one piece of good news: Seer Interactive also found that brands cited inside an AI Overview earn around 120% more organic clicks per impression than uncited competitors on the same query. Visibility inside the answer is worth more than ranking below it.

Why this matters for your PPC budget specifically

Three shifts change how a budget should be planned from here:

1. Impression share is now a partial metric. A campaign can hold position one and still lose ground, because attention has moved inside the AI summary itself. Judging performance on rank alone will overstate how well a campaign is actually doing.
2. Keyword-only campaigns are increasingly shut out. AI Overviews and AI Mode are triggered by long, conversational, mixed-intent queries, the exact phrasing a tight exact-match list was never built to catch. Google's own guidance is to move toward broad match or AI Max, its newer intent-based Search campaign type, specifically to reach that phrasing.
3. Not every sector qualifies. Google currently excludes sensitive categories, including finance, healthcare, politics, gambling, and alcohol, from AI Overview ad placements. Clients in those sectors need a different plan for 2026, not a copy-paste of what's working for retail and services.

What's actually eligible to appear inside AI Overviews right now

• Text and Shopping ads running through standard Search, Shopping, and Performance Max campaigns.
• AI Max for Search, which Google is positioning as the primary route into AI Overview and AI Mode placements going forward.
• Feeds and structured data quality matter more than they used to, because the AI is assembling the ad from your inputs dynamically rather than serving a fixed creative you wrote.

What's largely locked out: standard Search campaigns built entirely on exact and phrase match. That structure was built for a keyword-matching SERP that increasingly doesn't exist.

What we're changing in client accounts this quarter

We're not ripping up working campaigns overnight, but for Harri Digital clients we're now running through the same checklist:

• Auditing match type mix. Where an account is exact-match heavy, we're testing broad match and AI Max in parallel, not as a full replacement, so we can compare real cost-per-lead rather than guessing.
• Tightening feed and asset quality. For Shopping and Performance Max clients, product titles, structured data, and extensions get more weight now that they're feeding an AI system, not just a keyword match.
• Resetting what "good" looks like in reporting. Raw click volume is a shrinking number even for well-run accounts. We're weighting conversion quality and cost-per-acquisition more heavily than impression share and position when we talk clients through monthly performance.
• Flagging sector restrictions early. For clients in excluded categories, we're planning budget toward the channels that still work for them rather than chasing AI Overview inventory they can't access.
• Watching the recovery curve. Seer Interactive's data shows AIO-query organic CTR climbing from a low in December 2025 to a meaningfully higher figure by February 2026, as Google improved how it places links inside summaries. It's a partial recovery, not a return to 2024 levels, and budgets should be planned around the new normal rather than a hoped-for reversal.

FAQs

Do Google Ads now appear inside AI Overviews?

Yes. Since Google Marketing Live 2026, Search and Shopping ads can appear directly inside AI Overviews and AI Mode, triggered by inferred intent rather than matched keywords, rather than only in the traditional ad slots above or below the summary.

Will AI Overviews reduce my website traffic?

For informational and research-intent queries, most likely yes. Multiple independent studies show organic click-through rate falling somewhere between 15% and 60%+ depending on query type and ranking position when an AI Overview appears. High-intent, transactional queries are affected less than broad informational ones.

Do I need a new campaign type to show up in AI Overviews?

Not strictly, but standard exact-match Search campaigns are largely excluded. Google recommends broad match or AI Max for Search, its intent-based campaign type, to reach the long, conversational queries that trigger AI Overviews and AI Mode.

Which industries can't advertise inside AI Overviews?

Google currently excludes finance, healthcare, politics, gambling, and alcohol from AI Overview ad placements. Businesses in those sectors need to plan budget around other paid channels rather than this inventory.

Is this worth changing my PPC strategy for right now, or should I wait?

Worth acting on now. Coverage is expanding, not shrinking, AI Overviews are now appearing on a large and growing share of tracked queries, and accounts still built entirely on exact-match keywords are already missing eligible inventory competitors are picking up.

Harri Digital is a digital product studio and web development agency based in Plymouth, Devon. If you want an honest read on what AI Overviews are doing to your account, not a sales pitch, get in touch and we'll tell you straight.