The AI Impact on Paid Search
Irvine, CA | September 23, 2025 | Ryan McArthur

The AI Impact on Paid Search

How AI is Changing Paid Search

Artificial intelligence is completely transforming paid search. From Google's new AI Overviews that appear at the top of search results to the way search engines can now understand and predict what users want based on their past behavior and interactions, AI is reshaping everything. This means big changes for how people search, how ads get served, and what businesses need to do to stay competitive.

The Impact of AI Overviews (AIOs)

At the moment, AI Overviews are primarily impacting informational, upper funnel queries where ad prioritization is generally low. For now, paid search conversions and return on ad spend are holding steady. Here’s what the data says about how AI is affecting paid search:

  • Limited Impact on Transactional Queries: AIOs primarily appear for informational searches, not when people are actively ready to buy. In fact, 71.67% of searches that trigger AIOs don't have cost-per-click data, meaning there typically aren't ads running for those terms. Only 1.2% of AIOs show up for purchase-intent searches.
  • Lower Click-Through Rates (CTR) on Paid Ads: When AI Overviews appear with instant answers at the top of the search engine results page (SERP), paid ads are pushed down and visibility is reduced. From January 2024 to January 2025, click-through rates for paid ads that appeared in searches with AIOs dropped about 25%, from 8.76% to 6.56%. This indicates that people are finding the answers they need in AI summaries, and don’t need to scroll down to the ads.
  • Increased Cost-Per-Click (CPC): With AIOs taking prime SERP real estate, competition is driven up as advertisers fight harder and bid more to maintain visibility, especially for ad placements with high-value keywords.
  • Rising Zero-Click Searches: According to Bain, 80% of consumers resolve 40% of their searches directly on Google’s results page thanks to instant answers in the AIOs, particularly with informational queries. This means fewer clicks on both paid ads and organic website results.
  • Industry Impacts of AI Overviews: Finance and Legal industries have been disproportionately impacted, primarily due to their reliance on question-based searches like “how to get a mortgage”. CTRs have dropped as much as 25% on these queries as AI overviews provide users with immediate answers. The presence of AI overviews in B2B tech (70% of searches), healthcare (approaching 90%), and education sectors has also surged. Meanwhile, E-commerce and Travel companies, with a focus on transactional searches, are seeing minimal disruption with only 1.2% of related queries triggering AIOs.
  • Branded CPCs Going Up: While we’re not seeing it across the board, many advertisers are paying higher prices for branded search CPCs in 2025. The adoption of automated bidding, competitors targeting other brands, and campaigns pushing harder for increased results at lower efficiency rates have all contributed to rising costs. This push for more aggressive bidding is partly driven by reduced traffic volume in other areas, as users find what they need in the SERPs without clicking through to websites.
  • Ad Integration within AIOs is Here: Ads are now being shown in AI Overviews on both desktop and mobile for Search, Shopping, and Performance Max campaigns. This means even informational searches that rarely displayed ads in the past, may now show sponsored content within the AI summary as Google pushes to monetize their generative AI search features.

The Shifting Landscape: AI Apps, Browsers and Beyond

Thanks to Artificial Intelligence, we’re seeing a dramatic shift in how users interact with the internet, which is reshaping digital advertising and the entire future of paid search. 

Emerging AI Browsers: Redefining Web Interaction

  • A Different Approach: New AI browsers like Perplexity's "Comet," The Browser Company's "Dia," and OpenAI's rumored browser aren’t just showing links anymore. They understand what you want, pull information from multiple sources, perform tasks for you, and even allow you to complete purchases, all without ever leaving the browser interface.
  • Gradual Market Share Shift: Google Chrome still dominates with a formidable global market share of 65-68%, but AI browsers are expected to gradually gain traction. This will be driven by their highly personalized, task-oriented experiences that traditional browsers can’t match, allowing users to find everything they need in one place.
  • New Advertising Opportunities: New advertising formats will emerge as AI browsers gain users. Instead of the traditional click-and-impression model, we’ll likely see a shift towards integrated, AI-driven recommendations and transactional capabilities directly within the browser itself.
  • Just Getting Started: The AI browser landscape is still in its infancy. The companies developing them are testing the waters, and the success of these platforms and their monetization models are evolving. It's still an open question whether AI browsers will ultimately achieve widespread adoption, as they face hurdles like resistance to change, user habits, and Chrome's massive dominance.

The Broader Decentralization of Discovery

  • Beyond Browsers: AI browsers are just one piece of a much broader shift. Users are being drawn away from Google, and turning instead to AI apps and specialized websites to begin their searches, spreading discovery and information gathering across multiple platforms.

Google's Response: Adapting to the AI Era

  • Fighting Back: USIM does not expect Google to sit back and watch. In fact, they are actively responding to these shifts, by integrating ads directly into AI Overviews (AIOs) and exploring similar monetization strategies within their own AI-driven browsing features. This ensures they retain a dominant position in the search and browser landscape even as it evolves around them.

Strategic Implications for Media Planning

  • Holistic Strategy Needed: The most critical questions regarding the long-term landscape necessitate a broader media strategy discussion. The possibility of paid search's dominance declining is a real consideration.
  • Proactive Adaptation: If paid search's traditional role declines, we need to proactively define what tactics and alternatives would best serve our clients. While some future advertising opportunities, particularly within nascent AI solutions, are still taking shape, a strategic shift in our approach will be fundamental for both short-term adaptability and long-term sustained success.

USIM Approach to Paid Search

The current consensus in paid search emphasizes agility and precision to navigate dynamic market shifts. This means prioritizing long-tail keywords for highly specific user intent, ensuring ad relevancy across all campaigns to boost Quality Score and engagement. We strategically test broad match keywords, balanced with comprehensive negative keyword lists, to uncover new opportunities without sacrificing control. Continuous bid strategy testing is essential for handling fluctuations in performance, and Performance Max (PMax) should be considered where applicable, aligning with media plans and KPIs for expanded reach and conversion potential. We implement these practices by building comprehensive keyword sets that include long-tail terms, maintaining strict ad relevancy, carefully integrating broad match with robust negative lists, and continuously optimizing bid strategies while deploying PMax to meet specific goals and objectives.

Paid Search Strategic Optimizations

  • Strategic Adaptation, Not Panic: USIM recognizes that AI Overviews are still evolving. Instead of reacting to initial alarms, we monitor their presence and impact on our clients' specific query sets. Google’s recent adjustments suggest a more measured integration of AIOs, requiring ongoing vigilance.

  • Balancing Automation with Control: While Google's automation tools like Broad Match and PMax are powerful, we advocate for strategic and monitored implementation. Our experience shows that while automation can capture long-tail and conversational searches driven by AI trends, rigorous negative keyword management, audience exclusions, and performance analysis are critical to maintaining ad relevancy and managing costs within automated campaigns. We don't blindly accept automation; we optimize within it.

  • Target High-Intent Keywords: Prioritize mid- to lower-funnel queries less affected by AIOs to maintain conversions.

  • Experiment with Broad Match: Increase broad-match budgets to capture conversational, long-tail queries driven by AI search trends.

  • Monitor AIO Trends: Use tools like ZipTie.dev to track AIO presence and adjust campaigns based on SERP changes.

  • Optimize for AIO Inclusion: Use structured data and authoritative content to increase the potential of brand mentions in AIOs, boosting paid and organic CTRs. One study found that brand presence within AIOs emerged as a significant factor in performance metrics, with organic click-through rates increasing from 0.74% to 1.02%, while paid CTR rose from 7.89% to 11%.

Emerging Paid “Search” Opportunities

  • Ads in AIOs: Google is testing ad placements directly within AIOs, primarily for mobile Search, Shopping, and Performance Max campaigns. Industry experts anticipate broader ad integration, prompting agencies to develop tools and services to help clients understand large language models (LLMs) and AIOs.
  • Alternative AI Platforms: Platforms like Perplexity, which offer AI-driven search with potential ad placements like sponsored answers, are being explored as alternatives to capture zero-click search audiences.
  • Google’s AI Mode (Beta): Google is testing an AI Mode that displays only AI summaries without links, replacing the “I’m Feeling Lucky” button. This mode is still in beta, but could further reduce clicks if widely adopted, pushing advertisers to adapt strategies for zero-click environments.

While the digital landscape and paid search are changing, USIM is meticulously monitoring these developments to strategically position our clients for the evolving future of digital advertising.

Don’t let AIOs catch you off guard. Contact USIM today to discuss how we can help you future-proof your paid search strategy, optimize your campaigns, and position your brand for success in the era of AI.