Reduced Ad Visibility in Search Results
Comparison of a Google search results page with the AI Overview enabled (left) vs. without SGE (right). In the SGE example, a large AI-generated answer box occupies the top of the page, and the sponsored text ads (“Sponsored”) are pushed further down below the AI summary. In the non-SGE result (right), the ads appear immediately at the top. The AI overview thus significantly reduces the immediate prominence of paid ads, often displacing them from the prime “above-the-fold” area of the screen.
Ads are often pushed below the AI answers. Google’s new Search Generative Experience (SGE), now appearing as an “AI overview” at the top of many search results, tends to leapfrog both organic results and traditional ads. Paid search ads that used to be at the top of the page can now appear lower on the screen, beneath the AI-generated summary. A recent study of 100,000 queries found:
No ads in 27% of AI results: In over a quarter of searches with an AI overview, no ads at all appeared alongside the SGE snippet.
Ads usually below the AI box: When ads do show with an AI overview, standard text ads are more likely to appear under the AI snippet, while shopping ad carousels (for retail queries) are often placed above the AI. In fact, shopping ads were displayed on top of SGE results about 81% of the time in tests
Bottom-of-page placements: Overall, with SGE enabled, ads were more frequently shown at the bottom of the SERP than at the top. The AI responses themselves are quite large – one analysis found 84% of AI overviews cover more than half the screen (and 38% cover the full screen) on – which means any ads beneath the AI box are likely pushed below the initial viewport. This substantially diminishes their upfront visibility.
Google has acknowledged this shift in ad placement. In an official update during Google I/O 2023, the company showed that ads would continue to appear above and below the new AI snapshot in Search. They also began testing ads integrated directly into the AI overview itself, labeled clearly as “Sponsored” content. Philipp Schindler, Google’s Chief Business Officer, affirmed that ads will “play an important role” in these AI overviews, stating that “SGE is creating new opportunities for us to improve commercial journeys for people by showing relevant ads alongside search results.” In short, Google is still committed to showing ads in the AI-enhanced search – but those ads may not always occupy the very top spots they used to, especially for non-shopping queries.
Impressions Still Counted Even with Lower Placement
One important nuance is how Google counts an ad impression in these AI-driven results. An impression is logged whenever your ad is shown on a search results page, regardless of its on-screen position. According to Google’s own definition: “An impression is counted each time your ad is shown on a search result page”. This means even if your ad gets pushed below the AI overview (i.e. below the fold), it is still considered “shown” as long as it loads on the SERP.
In practice, advertisers have found that their ads can remain in a “top position” technically, yet be less visible due to the AI box. Your campaign might report a high Top Impression Share or “Absolute Top” position, but if an expansive AI answer appears first, the user may not see your ad without scrolling. The impression is recorded when the page loads, but the user’s eyes might never reach the ad. This discrepancy helps explain why many are observing normal (or even increased) impression counts alongside dropping click-through rates – the ads are still being served, but they’re getting seen and clicked far less.
Put simply, the AI overview can occupy so much prime real estate that it diminishes the practical visibility of ads, even though Google’s metrics still count those ads as delivered impressions. As a PPC strategist at Seer Interactive noted, AI summaries at the top “push Paid Search ads further down the page, reducing the chances that users will see or interact with them.” This effect is especially pronounced on mobile devices or smaller screens, where the first screenful is often entirely the AI answer. Advertisers need to be aware that an impression in an SGE context doesn’t guarantee the same level of user attention as an impression in a traditional Google search layout.
Falling Click-Through Rates (CTR) Despite “Top” Ad Positions
Click-through rates for Google Ads have noticeably declined since the rollout of AI overviews in Search. Multiple data sources – from official Google Ads performance reports to independent studies – are reporting significant CTR drops and are tying them, at least partially, to the new AI-driven results. Notably, this drop is occurring even for ads that are still ranked in the top ad positions (positions that historically yielded the highest CTR). Here’s what recent research and reports have found:
New historic lows in CTR: A February 2025 analysis on Search Engine Land highlighted that both organic and paid CTRs have hit new lows, and “Google AI Overviews are contributing to the decline.” Paid ad CTR was down even in cases with or without the AI overview present, suggesting a broad shift in user behavior on Google. (In fact, when no AI snippet was shown, paid CTRs were somewhat higher – indicating the AI itself is a key factor when it does appear.) The presence of the AI answer seems to siphon off user attention that previously might have gone to clicking results.
CTR drops by over 50% with SGE: In a study of ~10,000 search queries, Seer Interactive found a dramatic difference in ad performance when an AI overview was shown. “When AI Overviews were present in the search results, the paid click-through rate (CTR) dropped to 9.87%, compared to 21.27% when no AI Overview was shown for the same set of queries.” In other words, ads on pages with an AI summary saw roughly half the CTR of the same ads on pages without the AI box – a 53.6% decrease in clicks. This underscores how powerful the impact of the AI answer can be: users either get their answer without clicking or simply don’t notice the ads as readily.
CTR declines even without the AI box: Interestingly, the overall trend in late 2024 was that paid CTR was edging down across the board, not only on queries with SGE but even on those without. As one report noted, “CTRs have been decreasing steadily even when AI overviews aren’t shown.” This may indicate changes in searcher behavior (possibly people clicking fewer results generally, or changes in the types of queries being searched). It could also reflect that as SGE rolled out, it affected enough searches that aggregate CTR averages fell. In any case, the net effect for advertisers is a downturn in the proportion of searches that lead to an ad click.
Crucially, this drop in CTR is happening despite advertisers maintaining top ad positions (e.g. being the first ad above the organic links). Many advertisers have observed that their ads’ average positions haven’t changed, yet their CTR has declined – precisely because an AI answer is sitting in the gap between the search query and the ads. The AI overview often fulfills informational queries directly on the results page, so users are less inclined to click an ad (or any result) for more info. Google itself has described this phenomenon as part of a rise in “zero-click searches”, where people get what they need without clicking through.
To put it simply: being “#1” in the ad listings no longer guarantees the visibility or clicks it once did. As the AI overview grabs the top spotlight, even “absolute top” ads can suffer from drastically lower engagement. Advertisers are now grappling with this new normal, where paid CTRs are down significantly year-over-year because the AI-driven UI is intercepting user attention that used to flow to ads. This makes measuring and achieving performance more challenging – the same ad position yields fewer clicks than it would have before SGE.
Rising CPCs and Conversion Challenges Post-SGE
With clicks becoming harder to earn, advertisers are noticing shifts in cost and conversion metrics since Google’s AI overview rollout. In particular, there are growing concerns (and early evidence) around higher cost-per-click (CPC) and altered user engagement with ads and websites:
CPC increases due to reduced ad inventory: As SGE inserts itself into search results, there may effectively be fewer prime ad slots available per query (especially if users are less likely to scroll to multiple ads). Advertising experts predict that this dynamic will drive up CPCs. If only one or two ads are effectively visible around the AI snapshot, competition for those spots intensifies. A recent analysis by Lunio notes we could see “a rise in costs-per-click due to limited ad inventory” in the SGE environment. In addition, as organic SEO traffic declines for certain queries, more businesses may turn to PPC to reclaim visibility, further increasing competition and bids in the auctions. Some marketers are already reporting that to maintain volume, they’ve had to bid more aggressively, which raises CPCs. Essentially, fewer clicks overall means each click is more valuable – and more expensive – in the auction ecosystem.
Fewer clicks = fewer conversions: Early data suggests that the drop in ad clicks is also leading to a drop in conversions from search ads for many advertisers. Google’s AI overview often lets users find answers without clicking through, so naturally site traffic and downstream conversions are declining in those cases. Google’s own documentation has implied that many advertisers are seeing an “impact on clicks, site traffic, and conversions” when SGE is present. If you rely on search ads for lead generation or sales, a lower click volume means you have fewer opportunities to convert customers. Many brands have noted their overall conversion counts from Google Ads campaigns have slipped in tandem with CTR declines. Unless the conversion rate (the percentage of ad-clickers who convert) increases significantly to offset this, the result is a net drop in total conversions and a higher cost per acquisition. So far, there isn’t strong evidence that conversion rates have universally improved; if anything, users drawn in by an AI answer might be less primed to convert (since they were looking for quick info).
Changing user engagement and behavior: The presence of AI summaries is altering how users engage with search results. Those who do click on ads might behave differently – for instance, they may have already consumed some information from the AI snippet, possibly making them further along in the research process (or conversely, more fickle if they were just info-gathering). Some in the industry have speculated that if a user scrolls past the AI overview to an ad, they could be a more motivated buyer, which could yield higher quality clicks or conversion rates in certain cases. However, this is speculative; the broader trend seen is that overall engagement with paid results is down. Advertisers are paying more for each click, and total conversions are not rising to make up for the lost volume. One silver lining is that Google is experimenting with ad formats within the AI overview that might capture user attention better in the future (e.g. interactive product ads within the AI answer). If those prove effective, it could improve engagement and conversions from AI-integrated ads. For now, though, most reports paint a challenging picture: higher CPCs and lower conversion opportunities in the post-SGE search landscape.
In summary, the rollout of Google’s AI Overview (SGE) has introduced a paradigm shift for search advertisers. Ad visibility has been reduced by the AI snapshots, which often commandeer the top of the results page and push ads down. Impressions are still being counted as ads load, but those impressions translate to far fewer clicks – as evidenced by significant CTR declines (even for ads in top positions). Consequently, many advertisers are observing diminished click and conversion volumes, while facing the likelihood of increasing CPCs due to intensified competition for the remaining high-visibility slots. It’s a developing situation, and both Google and marketers are actively watching these trends. As Google refines the SGE experience (and perhaps finds ways to better blend or highlight ads within it), the hope is that the balance can be restored. Until then, advertisers are urged to adapt their strategies – for example, by focusing on more compelling ad copy, experimenting with other channels, or adjusting bidding – to mitigate the impact of AI overviews on their paid search performance.
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