Google’s introduction of ads in AI Mode could boost the chances of small and mid-sized businesses to become more relevant in the era of generative search and provide a new avenue for conversational engagement with their target audience.
The search giant on May 20 introduced conversational discovery ads, which let businesses use their ads to answer a person’s specific question. It also presented highlighted answers, a feature in AI Mode that provides a list of business recommendations based on what people are searching for. Google is also introducing Business Agent for Leads, built with Gemini. This puts a smart brand agent into the business’s ads, so users can get instant answers by clicking chat on the business’s website.
The new capabilities target a challenge that has surfaced since the advent of generative search two years ago. Many businesses face the problem of being discovered and trying to find a way to use generative search in their favor. This problem is evident not only in Google Search but also in generative AI search engines such as Perplexity and chatbots such as ChatGPT. With these new ads in AI Mode and highlighted answers, Google gives businesses a chance to stand out by being inserted directly into both consumers’ purchase experience.
“The broader strategy is to close the gap between intent and transaction while embedding agentic capabilities across its stack,” said Nikhil Lai, an analyst at Gartner. He added that with this approach, Google will likely become the default platform for AI-driven marketing, measurement and commerce orchestration.
More Discoverability
With these capabilities, Google also reduces the need for businesses to optimize for user search, Lai said. He added that with product guidance and decision support embedded in ads, smaller advertisers can show up in AI-driven discovery moments that large brands with strong search infrastructure previously dominated.”
Particularly with Business Agents, ads will now allow real time, conversational engagement, with customers able to ask questions and complete actions like submitting forms without leaving search, which helps with lead generation, Lai said.
“It effectively turns ads from static placements into interactive conversion experiences powered by first-party business data, improving efficiency and responsiveness for advertisers,” he said.
He added that while these capabilities help SMBs be visible within AI-driven experiences, they do not fully address all challenges, such as brand differentiation in AI responses on.
“Success now depends on adapting to conversational relevance and AI interpretation, not just media spend or targeting,” Lai said.
