Google's Stock Slides 10% on AI Search Woes as Ad Dollars Move to Meta

Google's stock price dropped more than 10% after its Q3 earnings call last month, driven mostly by a major slowdown in search advertising growth — and the culprit, according to the company's own trajectory, is Google's AI Mode. Six advertisers and agency executives told The Information they have moved ad dollars to Meta after determining their budgets weren't delivering results on Google.

Meta has leaned hard into AI itself, including its recently launched Muse agent, but those products don't compete with Meta's core ads business. That structural difference is the whole story: Google's AI Mode cannibalizes the search ads that fund it; Meta's AI sits beside a healthy ad engine.

Google is still looking for ways to make its ad tools more effective. It is partnering with Hightouch to give advertisers better access to customer data, a person familiar with the partnership told The Information. But data access won't fix the complaint that ads simply aren't reaching enough people.

"I want to give Google more money," Nicholas Verity, CEO of B2B lead gen company Cleverly, told The Information. He said Google couldn't make proper use of his $2,000-a-day budget — too few people were seeing or clicking on his ads.

Where are the new chatbot ad formats appearing?

Brands want to test ads inside AI search, but inventory is still limited. The agentic search platforms are racing to change that, and several products went live in a single week:

• ChatGPT announced "visual ads" a month ago — ads shown during the waiting period after someone asks to generate an image — and Search Engine Land reports they are now starting to appear.
• Google announced plans last month for multi-turn ads in AI Mode, which surface sponsored results as users ask follow-up questions; Search Engine Roundable reports they are appearing in the wild now. Ads for AI Mode are also now available in more than 10 global markets, making good on an October pledge.
• Bing Ads has begun showing ads atop responses within Bing AI Mode (formerly Copilot Search) and within AI Overviews — both Google-inspired names in Microsoft's lineup.
• Yahoo Scout, Yahoo's ad-supported agentic search chatbot, just came out of beta.

The takeaway: AI search monetization has moved from announcements to live product in under a month.

Is the next video pivot already here?

Digital publishers got burned during the first pivot to video in the mid-2010s, when Meta was found to be overinflating view numbers. The shift to vertical video proved far more durable. TikTok's pandemic-era explosion pushed Meta Reels and YouTube Shorts into every feed, forcing publishers that avoided TikTok to produce vertical video anyway. The format worked because it favored a stripped-down, authentic experience over polished production; publishers cast their own reporters as news influencers, struck partnerships with real influencers, and clipped podcasts into vertical video, itself a post-pandemic growth category.

Now the platforms are plotting the next pivot, as The Verge reports. YouTube is working with creators on full-length shows, and Instagram is testing a 90-minute horizontal video product called Features. Longer-form video means higher production costs, and the goal is deeper engagement with more ad slots. This pivot — video 3.0 — may not prove as publisher-friendly as the vertical era.

What else happened this week?

• FedEx will change its practices and pay a $3 million fine after California privacy regulator CalPrivacy accused it of misleading customers. FedEx claims it didn't sell or share personal data but used it for contextual ad targeting.
• OpenAI launched a self-serve Business Hub, now in beta, letting brands manage their information and get analytics on how people engage with them in ChatGPT, Adweek reports.
• TikTok Shop introduced a paid membership tier that includes order delivery, per Modern Retail.
• The Online News Association is pausing in-person events and will not host a conference next year, citing shrinking "professional development and sponsorship budgets."
• Adobe is expanding its AI agent offerings, The Verge reports.
• Supermarket fridge hacks, reported by the WSJ, show the danger in connecting everything to the internet.

Who got hired?

• Samsung Ads appointed Nelson Boyce as SVP of ad sales (Adweek).
• Operative brought on Brian Beirne as senior VP of commercial growth.
• OneRail named Amit Batra as SVP of supply chain and Nathan Rucker as SVP of strategic growth and partnerships.

The pattern across the week: money is leaving incumbent search placements faster than AI search can sell replacement inventory — and whoever closes that gap first will define the next ad budget cycle.