Google's AI ad gambit: Is Gemini a new channel or just 'search in a new skin'?

Google has quietly told major advertisers that it is exploring ways to introduce ads into Gemini, its flagship conversational AI assistant — with an internal target of 2026 — according to early briefings first reported by Adweek. But later statements from Google suggest the company is walking back or at least softening the claim, saying it has no confirmed plans to bring ads directly into the standalone Gemini app at this time.

The contradictory signals have left marketers, analysts and investors unsure whether Google is preparing to commercialize Gemini aggressively, or simply testing the waters as it works out how conversational AI fits into its broader advertising ecosystem.

Early advertiser briefings reportedly offered broad outlines with few specifics: no clear ad formats, pricing models, or details on how commercial signals might influence Gemini’s answers. Google positioned the initiative as separate from AI Mode, its AI-powered search experience launched earlier this year. Yet in subsequent statements, the company suggested the reports overstated the immediacy of any Gemini-specific advertising rollout.

The tension highlights a broader challenge facing Alphabet as it embeds Gemini across Search, Android, Workspace, and Cloud, the company must balance user trust in AI assistants with the economic engine that funds most of its business.

Is Gemini a New Ad Channel or Just Search in a New Skin?

The ambiguity around Google's plans has sparked renewed debate across the advertising industry.

Gopa Menon COO & Co-founder at Theblur says the distinction is subtle but important. “Is Gemini a new channel or an evolution of Search? As of now, it’s more accurate to think of Gemini with ads as an evolved interface layer sitting on top of Google’s existing ad infrastructure. The queries still tap into the same advertiser ecosystem, auction systems, and inventory that power Search and YouTube.”

The difference, he argues, is the interface. “In traditional search, you get ten blue links and some ads. In Gemini, you get a conversational answer with embedded commercial opportunities. Over time, as users shift high-intent queries to assistants, it could absolutely emerge as a distinct third channel with its own metrics, bidding strategies, and performance characteristics.”

Rajiv Dingra, Founder and CEO of ReBid, frames it similarly. “If Google brings ads into Gemini, it technically becomes the third major performance surface but not a completely new channel. It’s a conversational UX layer on top of Google’s existing ad ecosystem. Intent stays the core, but how intent is expressed—natural language, task flows, multi-step reasoning—changes everything.”

If Ads Do Come, What Would They Look Like?

Even with the uncertainty, advertisers are already speculating on the formats that could make sense inside a chat-based AI assistant.

Menon says banners and pre-roll ads are out of the question:

“Traditional display banners make no sense in a chat interface.”

Instead, he envisions formats designed to feel native to conversation: • Sponsored product recommendations • Sponsored follow-up prompts: “Compare prices?” • App or service suggestions • Affiliate-style attribution for purchases made through Gemini • Sponsored data citations

“Successful formats need to feel native, not bolted on,” he says.

Dingra predicts similar formats focused on utility-first, interruption-free engagement:

“Sponsored follow-up questions, AI-generated comparison cards, action modules like ‘Book’ or ‘Buy’, app suggestions, and contextual affiliate links will dominate. Traditional banners won’t survive in a chat interface.”

A More Complex Auction System Would Be Required

If Google proceeds, the economics could reshape how ads are bought and sold.

Gopa says Gemini introduces far richer — and more complicated — auction dynamics than traditional search:

“The auction would need to evaluate the entire conversation history, ambiguous intent, multiple insertion points, and the relevance of a sponsored follow-up. Google would need a new auction layer that predicts where commercial intent is emerging.”

Advertisers might stop bidding on keywords and start bidding on conversation states, intent signals, and behavior patterns — a fundamental shift.

The Broader Risk: High-Intent Queries Leaving the Open Web

Dingra warns this shift could accelerate the migration of valuable commercial queries into closed AI ecosystems:

“Assistants collapse discovery, evaluation, and comparison into a single interface. If Gemini pushes ads into that flow, more high-intent queries may never hit the open web or classic search results. Intent is moving from pages to prompts.”

That may further disadvantage publishers, who already struggle with declining visibility from generative AI.

The Economic Stakes

Dingra notes that AI platforms are converging on four monetization models — subscriptions, enterprise licensing, AI app-store ecosystems, and advertising/commerce — but advertising remains the biggest opportunity if trust can be maintained:

“Search ads are the most profitable model in digital history. Assistants introduce implicit intent, which could unlock deeper monetization — but only if done carefully. Users expect assistants to be neutral advisors. This tension will define the next decade of AI monetization.”

So… Are Ads Actually Coming to Gemini?

The honest answer: it’s unclear. Google’s initial briefings made advertisers believe the company was preparing a 2026 rollout. Later statements imply those discussions were exploratory — not a confirmed product roadmap.

For now, what’s certain is that Google is experimenting, advertisers are strategizing, and the entire industry is bracing for a world where conversational AI becomes either: a third major performance channel or simply the next evolutionary layer of Google Search.