Observed Signal · Jan 12, 2026 · Product Launch · Source: OnlineMarketing.de · Impact: 3/5 · Sentiment: Positive
Google Tests AI Mode Ads with Direct Offers
Google is testing a new Direct Offers feature within its AI Mode advertising in Google Search. The pilot, limited to selected brands in the United States, lets advertisers present exclusive deals to AI Mode users with a "Sponsored deal" label. Products appear as Merchant Center-linked listings, and advertisers can specify deals in campaign settings. Google and Gemini’s AI determine which offers to display based on search context. Direct Offers are described as a negotiation tool rather than a standard ad, relying on advertiser-supplied deal codes and Merchant Center feeds so the AI doesn’t invent deals. The initiative runs alongside Performance Max and Standard Shopping campaigns and follows broader AI-commerce developments like Universal Commerce Protocol and a native Gemini checkout. Wider rollout will depend on ongoing testing and results.
Introduction of Direct Offers AI Mode ad format with potential industry impact
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Key Takeaways & Evidence Grounding
- Google tests Direct Offers, a new AI Mode ad option delivering exclusive deals.
- Pilot program in the USA limited to selected brands.
- Ads are labeled 'Sponsored deal' and present exclusive discounts.
- Deals come from Merchant Center feeds and advertiser-provided deal codes; Gemini AI selects offers per context.
- Direct Offers operate alongside Performance Max and Standard Shopping campaigns and are not standard ads.
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Google Unveils AI Mode Shopping Ads & UCP Checkout
Google announced a suite of AI-enabled shopping advertising formats for AI Mode, designed to surface retailer offers in AI-powered conversations. The centerpiece is Direct Offers, a new format that presents personalized deals from various retailers within the AI Mode chat, using Merchant Center feeds and advertiser-provided deal codes, initially in the United States with a Sponsored label. The company also introduced AI Mode Shopping Ads, where Gemini suggests a fitting product and displays comparable retailer offers with price and shipping details. In addition, Google is rolling out the Universal Commerce Protocol (UCP) Checkout to streamline purchases directly from search or the Gemini app, starting with Etsy and Wayfair and later expanding to Target, Shopify and Walmart. Google frames 2026 as the year Agentic Commerce becomes standard, backed by an open protocol developed with Shopify, Etsy, Wayfair, and Walmart. The article notes 2025 ad revenue above $400B and 2026 capex guidance of $175–$185B.
Google to Run Ads in Gemini AI
Robby Stein, Google's VP of Product for Search, signals broader advertising expansion within Google's AI initiatives, including AI Mode and other AI services. He notes experiments and the potential for ads to appear in AI results, initially in the US, with plans to extend to Gemini and additional AI-powered products. The piece highlights Google's reliance on ad revenue, reporting $56.7 billion in ad revenue in Q3 2025, with YouTube Ads amounting to $10.3 billion. Stein describes anticipated ad formats that could support shopping contexts or complex AI queries, including recommendations within AI contexts. The article also mentions Pomelli, Google's AI marketing tool for SMEs, and draws a parallel to OpenAI's reported 2026 Ads in ChatGPT timeline. Timing and scope for German deployment remain uncertain.
Google Says AI Ads Lift Online Sales Up to 80%
Google says its AI-powered advertising tools and new shopping integrations are producing measurable results for some brands, citing examples like Aritzia seeing an 80% revenue lift after adopting AI Max. The company reported more than $400 billion in 2025 revenue, with Q4 ad revenue of $82.28 billion and YouTube ad revenue of $11.38 billion. Google is testing ads inside its Gemini-powered AI search (AI Mode), a “business agent” feature that lets retailers shape brand voice (early adopters include Poshmark and Reebok), and a pilot called “direct offers” with brands such as E.l.f. Beauty, Chewy and L’Oréal. Google also introduced the Universal Commerce Protocol with Shopify to enable purchases inside AI conversations. Competitors including Amazon, OpenAI and Perplexity are also experimenting with ads in AI search, with mixed results so far.
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