Google appears to be experimenting with a new ad format within its Search Generative Experience (SGE). This new feature provides an AI-generated answer alongside sponsored content titled “You May Also Like” when users ask follow-up questions to queries. The sponsored content is displayed in a carousel format, showing product title, image, and company name.

The potential impact of SGE is anticipated to be a decrease in click-through rate (CTR) by up to 30% for both organic and sponsored content. However, if brands can secure higher placements within the SGE, it may positively affect CTR. These ad formats are still in the testing phase, and Google has not confirmed details about potential costs for these placements.

SEO consultant Glenn Gabe spotted the new ad format test and shared his findings. He noted that while the new ad format showed up in SGE for about a day in response to follow-up questions, it then disappeared. This suggests that Google is actively testing the module of sponsored content.

A Google spokesperson stated that Search ads will continue to play a critical role as Search applies the power of generative AI. They will serve as additional sources of useful information, helping people discover millions of businesses online. Search ads will continue to appear in dedicated ad slots throughout the page, offering advertisers the opportunity to reach potential customers along their search journeys.

As Google tests and evolves the ads experience, the company is committed to transparency and making ads distinguishable from organic search results. When Search ads do appear, they will continue to feature the industry-leading clear and transparent ad labels with the ‘Sponsored’ label in bold black text.

The potential impact on advertisers is significant. If the new ad format becomes a permanent feature, it could significantly impact the visibility and performance of both organic and sponsored content. Marketers should stay tuned for updates on these ad formats and be prepared to adjust their strategies accordingly.

For a deep dive into How Search Generative Experience Works, readers can refer to a guide by Search Engine Land contributor Michael King. The potential implications of these new ad formats could significantly impact digital advertising strategies, and advertisers should closely monitor the developments in this space.