The AI paradox: How Meta’s ad business is benefiting from artificial intelligence, but Google is suffering | Mint
The AI paradox: How Meta’s ad business is benefiting from artificial intelligence, but Google is suffering
Alphabet’s search ad revenue missed expectations as greater use of AI Mode contributed to slower growth. Meta reported $63.1 billion in ad revenue, with AI helping improve ad creation, targeting and engagement. Google says longer AI-powered queries could create new monetization opportunities.
Last week, Google’s parent company, Alphabet, reported disappointing results in its core search advertising business. Revenue from ads came in at $82 billion, missing expectations of $83.4 billion.
Chief business officer Philipp Schindler attributed a larger-than-expected deceleration in search advertising growth to greater use of AI Mode, a chatbot interface for the search engine with which the company is still experimenting with ads. Google would begin rolling out advertisements in AI Mode to international markets, Schindler told a conference call.
Google vs Meta ad revenue
In contrast, tech giant Meta, the parent company of Facebook, Instagram and WhatsApp, reported $63.1 billion in advertising revenue in the third quarter.
While Google remained slightly ahead in terms of ad revenue, Mark Zuckerberg’s social media juggernaut is closing in on the search engine behemoth on its core business. The trend has been in favour of Meta for the past few years, and in April this year, it was reported that the social media company was on track to dethrone Google as the global leader in digital advertising revenue by the end of 2026.
What worked for Meta
In a post on X, Simon Smith, EVP of Generative AI at Klick Health, a Canada-based health marketing agency, said that Meta’s ad business benefits from AI and Google’s search ad business suffers from it.
According to him, Meta benefits from AI by having:
Generating better ads for businesses that perform better
Better match those ads to users
Better algorithms keeping people on platforms longer
“All of this makes advertising on Meta platforms more valuable, which in turn leads businesses to bid more and spend more on ads there,” Smith added.
Why Google is lagging behind
For Google, the aggressive push towards AI, including the Gemini chatbot and AI summaries in search results, has been a double-edged sword. In the earnings call last week, executives said that the strong growth of Google’s AI Mode contributed to a deceleration in revenue growth because the company earns less ad revenue from AI than from traditional search.
That is because AI bots, including those from rivals like ChatGPT and Claude, are replacing search as a
What is next for Google?
Google CEO Sundar Pichai, however, remained optimistic that the company can adapt to how queries are made in AI Mode, which are, on average, three times longer than traditional searches, and new forms of activity are driving that query growth.
“I would view it as an expansion opportunity,” Pichai said. “Just like a few years ago, being able to incorporate AI chat use cases in search allowed people to ask more and do more in search, which is what is playing out in our usage.”
CBO Schindler also outlined a similar view. “The majority of AI mode queries are incremental, creating more monetization opportunities over time. Our user research shows that people are comfortable with ads on these surfaces and find them highly relevant,” he said.
About the Author
Bobins loves telling the human side of all stories, from the intersection of geopolitics, international relations, and conflicts around the world. In his nearly one-and-a-half-decade career as a journalist, Bobins has covered South Asia, the Middle East, and North America, from elections to mass protests and conflicts. <br> Bobins has also done extensive reporting on environmental issues, climate change, and sustainability, focusing on solutions and people working to make the planet a better place to live. <br> In 2018, Bobins was awarded by Times Internet for the impact of his story on Delhi tree cuttings. Bobins also loves telling the stories of Indian startups and the journey of their founders. <br> Total Years of Experience: 14 <br> Years of experience at LM: Bobins has been a part of Live Mint since February 2026 <br> Interests: When he is not tracking conflicts, Bobins loves to cook, travel across India, click photos, and watch documentaries on history. Past Experience: Before joining Live Mint, Bobins worked with The Indian Express, where he led the Global Breaking News coverage, Indiatimes, where he led the news team, covering everything trending, ANI, where the focus of his coverage was South Asia, and NBS News. <br> Current Role: Bobins is currently working as an Assistant Editor at Live Mint.
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