Google is introducing new personalised advertising into its AI shopping tools, as it seeks to make money from the hundreds of millions of people who use its chatbot for free and gain market share from rival OpenAI.

Advertisers will be able to present exclusive offers to shoppers who are preparing to buy an item through Google’s AI mode, which is powered by its Gemini model, the Alphabet-owned tech giant announced on Sunday.

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It also represents a move away from the tech giant’s traditional ‘sponsored’ ad placements in search results, which generate tens of billions of dollars for the company but has come under threat by the rise of AI chatbots.

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“It essentially gives retailers the flexibility to deliver value to people shopping in AI mode, whether that’s a lower price, a special bundle or free shipping. In the moment, it matters most . . . to just close the sale,”

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AI groups, including OpenAI, Microsoft and Perplexity, have rushed to launch ecommerce features in their chatbots over the past year as they hunt for new ways to generate revenue from their popular but costly AI products.

OpenAI has been rolling out its checkout feature, first reported by the FT, which sees the AI start-up take a cut of the sales made on ChatGPT.

Microsoft launched its Copilot Checkout on Thursday, which also provides users with recommendations and checkout in its AI chats. The group said shopping through Copilot led to 53 per cent more purchases within 30 minutes of interaction compared to those without.

Google also introduced a “universal commerce protocol”, which it said would enable shopping agents to research products and make purchases without leaving its platform. The protocol was developed with large retailers and marketplaces including Walmart, Target and Shopify.

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Google’s new ads feature will make use of the contextual information from peoples’ conversation with the chatbot in AI mode, and trigger offers on relevant products that user have clicked on.

Retailers can set up offers they want to be available, with Google then using AI to determine when it is best to display the deal to a potential customer.

Srinivasan said Google was “initially focusing on discounts for the pilot and will expand to support the creation of offers with other attributes that help shoppers prioritise value over price alone, such as bundles and free shipping”.

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Source: Google introduces personalised shopping ads to AI tools

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