Google just announced it’s bringing ads directly into AI Mode, the conversational AI search experience that launched in 2025. The February 11, 2026 announcement from Vidhya Srinivasan, VP/General Manager of Ads & Commerce, confirms what many suspected: AI-powered search is becoming a paid advertising channel.
For Shopify merchants, this changes the game. If your products aren’t ready for AI-driven discovery, you’ll miss out on a new shopping format that places sponsored product listings right alongside AI-generated recommendations. Here’s everything announced and what it means for your store.
What Did Google Actually Announce?
Google’s February 11, 2026 blog post covers five major developments. Here’s the breakdown:
1. Ads inside AI Mode. Google is testing a new ad format within AI Mode that showcases retailers selling relevant products, clearly marked as “Sponsored.” These ads appear below AI-generated organic recommendations, giving shoppers convenient buying options right in the conversation.
2. Direct Offers. A new monetization format where businesses share tailored offers with shoppers ready to buy, without changing their public pricing. Google plans to expand Direct Offers to include loyalty benefits and product bundles beyond just price.
3. UCP-powered checkout is live. The Universal Commerce Protocol now enables purchases from Etsy and Wayfair directly within AI Mode in Search and the Gemini app. Shopify, Target, and Walmart are coming soon.
4. Veo 3 in Ads Asset Studio. Google’s AI video generation tool (Veo 3) is now available for advertisers to create studio-quality video ads from product images in minutes.
5. AI Max for Search campaigns. Google’s AI-powered campaign tool is unlocking what they call “billions of new search queries” by matching ads to queries that traditional keyword targeting would miss.
How Do Ads in AI Mode Work?
When a shopper asks AI Mode a complex question (like “which high quality, affordable headphones should I buy for my commute?”), Google’s AI generates a conversational response with product recommendations.
The new ad format adds a “Sponsored” section below those organic recommendations. In the example Google shared, a headphones query surfaces Sony WH-CH720N as an organic recommendation, followed by sponsored listings from Target ($99.99, free 90-day returns) and B&H ($98.00, free shipping).
Key details about the ad format:
- Ads are clearly labeled as “Sponsored” with a visible label
- They appear below organic AI recommendations, not mixed into them
- Each ad shows the retailer logo, price, and a key benefit (free returns, free shipping)
- Google is testing this in retail first, with travel and other categories coming next
- The format fits naturally into the conversational flow, bridging inspiration and action
Google’s own research shows that AI Mode provides a more helpful shopping experience when users can compare a variety of brands and stores. The sponsored listings extend that comparison to include purchase options.
UCP Checkout: Buy Directly From AI Mode
The biggest development for merchants isn’t just the ads. It’s that shoppers can now complete purchases without leaving Google.
The Universal Commerce Protocol standardizes how businesses connect with AI agents across the entire shopping journey, including secure payments. UCP-powered checkout is rolling out now, letting US shoppers buy items from Etsy and Wayfair right in AI Mode.
The checkout flow works in four steps:
- Discovery: Shopper asks AI Mode for product recommendations
- Selection: Browse products with details, pricing, and reviews
- Review: Confirm order with shipping details and Google Pay
- Confirmation: Order complete with delivery tracking
Shopify, Target, and Walmart are the next platforms joining UCP. For Shopify merchants, this means your products could be purchasable directly inside Google’s AI experience once the integration launches.
Google has received interest from hundreds of top tech companies, payments partners, and retailers since UCP launched in January 2026. If you want to understand UCP in depth, read our complete UCP guide.
What Does This Mean for Shopify Merchants?
This announcement has practical implications whether you’re running Google Ads today or not.
If You’re Already Running Google Ads
Your existing campaigns may already qualify. Google’s AI Max for Search campaigns is designed to expand your reach into AI-driven queries. According to Google, AI Max is unlocking billions of new search queries that traditional keyword targeting misses. If you’re running Performance Max or Search campaigns, your products may start appearing in AI Mode results.
Action items:
- Ensure your Google Merchant Center product feed is complete and accurate
- Enable AI Max features in your Search campaigns
- Monitor new impression sources in your campaign reports for AI Mode traffic
If You’re Not Running Google Ads Yet
The organic opportunity is real, but competitive. AI Mode already surfaces organic shopping recommendations. Making your product data structured, detailed, and optimized gives AI a reason to recommend your products. This overlaps with preparing your store for agentic commerce and which platforms support it.
Action items:
- Optimize your product titles, descriptions, and images for AI readability
- Add structured data (JSON-LD) to your product pages
- Set up Google Merchant Center and submit your product feed (free listings are available)
- Read our guide on what data AI agents need to sell your products
Prepare for UCP on Shopify
When Shopify joins the UCP ecosystem (confirmed as “coming soon”), your products could be discoverable and purchasable inside AI Mode and the Gemini app. Get ahead by:
- Making sure your product data is rich and accurate
- Having competitive pricing and clear shipping policies (these show in AI Mode cards)
- Keeping inventory status updated in real-time (out-of-stock products damage your AI visibility)
Veo 3 and AI Creative Tools for Advertisers
Google also announced Veo 3 integration in Google Ads Asset Studio. This lets advertisers generate video ads from product images using AI. In 2025 alone, there was a 3x increase in Gemini-generated ad assets by advertisers (Google, 2026). In Q4 2025, Gemini generated nearly 70 million creative assets in AI Max and Performance Max campaigns.
For Shopify merchants, this means:
- Lower creative costs: Generate video ads from your existing product photos
- Faster iteration: Test multiple creative variations without hiring a video team
- Better performance: Video ads typically outperform static images in engagement
The Veo 3 tools (alongside Nano Banana for image generation) are available through Google Ads Asset Studio. You upload a product image and the AI generates video clips with different styles and contexts.
Direct Offers: Personalized Pricing in AI Mode
Direct Offers is a new pilot format that lets businesses share tailored offers with shoppers who are ready to buy, without changing what they offer everyone else. Think of it as AI-powered promotional targeting.
Google plans to expand Direct Offers beyond price discounts to include:
- Loyalty benefits for returning customers
- Product bundles with special pricing
- Exclusive promotions for high-intent shoppers
For Shopify merchants, this could become a powerful conversion tool. If a shopper is comparing headphones in AI Mode, a Direct Offer could surface your product with a special discount that tips the purchase decision your way, without changing your public pricing.
What About AI Overviews (Non-AI Mode)?
Google’s traditional AI Overviews (the AI summaries that appear in regular search results) already show ads. The AI Mode announcement extends this to the full conversational experience. Both formats now support sponsored product listings.
The key difference: AI Mode is conversational and multi-turn (shoppers ask follow-up questions), while AI Overviews are single-response summaries. AI Mode ads will likely see higher engagement because shoppers are actively exploring and comparing.
Timeline and Availability
| Feature | Status | Availability |
|---|---|---|
| Ads in AI Mode | Testing | US, expanding 2026 |
| Direct Offers | Pilot | Limited advertisers |
| UCP Checkout (Etsy, Wayfair) | Live | US shoppers |
| UCP Checkout (Shopify, Target, Walmart) | Coming Soon | Expected 2026 |
| Veo 3 in Ads Asset Studio | Available | All advertisers |
| AI Max for Search | Available | All advertisers |
The Bottom Line
Google is turning AI Mode into a full shopping channel with ads, checkout, and personalized offers. This isn’t a future prediction. It’s happening now.
For Shopify merchants, the action plan is clear:
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Get your product data ready for AI discovery. Structured data, complete descriptions, and quality images are table stakes. Our guides on what data AI agents need and implementing agentic commerce on Shopify cover exactly how.
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Set up Google Merchant Center if you haven’t already. Both organic and paid AI Mode visibility depend on it.
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Watch for Shopify’s UCP integration. When it launches, your products will be purchasable directly inside Google’s AI. Having clean product data now means you’ll be ready on day one.
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Experiment with AI Max in your existing Google Ads campaigns. The new AI-driven query matching is already expanding reach for advertisers.
The merchants who prepare their data and storefronts now will have a significant head start when these features go fully live. The ones who wait will be playing catch-up in a channel that’s already moving fast.
About Akash Radadiya
