How Search Generative Experience (SGE) Impacts Ads?

  • 9 min read

Search Generative Experience (SGE) is increasingly impacting the Google search landscape, driven by the rise in Artificial Intelligence. While this presents new challenges for digital marketers, it also opens up fresh opportunities for advertisers and e-commerce businesses, now and in the near future.

The extent to which Search Generative Experience will change the game for advertising remains uncertain, however, what’s clear is the impact it’s already having on the PPC experience for searchers. 

In this article, we explore how Search Generative Experience influences Google Ads. We highlight key considerations for advertisers and how best to adapt to this evolving landscape. 

  • Search Generative Experience (SGE) is AI-powered content that’s showing up at the top of Google's search results page. 
  • SGE impacts ad placement on Google, however, shopping ads appear above SGE 81% of the time, which is good news for e-commerce.
  • Learn how SGE is set to impact keyword length, keyword research and the click-through rate (CTR) of Google Search and Shopping ads.
  • The way advertisers approach ad copy will likely need to evolve as content and the way users engage with it becomes more conversational. 
  • Find out what Google has said about the deployment of Search Generative Experience so far. 

What is Google Search Generative Experience?

Search Generative Experience is AI-powered content that is being incorporated into Google’s search results, triggered when a user searches. SGE results are contextually relevant to a particular query and the purpose is to provide useful information directly on the results page, minimizing the need to click on website links to find information. 

Traditionally, Google features ads at the top of the search engine results page (SERP), followed by organic listings whose ranking is based on SEO. However, SGE changes things up with AI-generated content appearing at the top. SGE content can appear both before or after search and shopping ads. 

The following animation demonstrates how it works, with generative content surfacing useful information and a selection of relevant links, tailored to the search query and the individual searching:


SGE is still in development and it has only been partially released. There have been several changes to the look and feel of SGE content since it was first unveiled last year, however, all versions have been fairly similar in how and where it appears on the SERP. 

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7 ways Search Generative Experience impacts PPC ads  

Let’s explore the main ways Search Generative Experience impacts search and shopping ads, in terms of how ads are evolving, how marketers can adapt to this change and what it means for advertisers and consumers. 

  • Shopping ad placement above AI-generated response 

Search Generative Experience content generally appears at the top of the SERP and ads can appear above this, as well as below, right before organic content. Expanding an SGE response then pushes search ads and organic listings further down the page as the generative content takes up more space.  

Studies found that 84% of SGE responses cover more than half of the screen, while 38% cover the full screen, meaning SGE content is large and demands much of the spotlight. This will no doubt impact ad placement as we know it, although not necessarily in a negative way. 


Source: Reddit:

Ads served above SGE will continue to get great exposure and a competitive edge compared to those that appear below, which perhaps makes ad rank and absolute top-of-page impression share even more important metrics. Ads that appear below will need to work harder to stand out from the competition to attract clicks. 

Shopping Ad placement

It’s reported that Google Shopping ads and search generative content often appear together. However, shopping ads are said to appear above SGE 81% of the time, which is great news for Google Shopping advertisers and e-commerce businesses. 

Shopping ads have generally always appeared at the top of the SERP and based on early insights, this hasn’t changed. What this could mean for e-commerce going forward is greater reliance on Google Shopping and the Google Merchant Center for generating visibility and driving traffic to the online store. 

The full extent to which search and shopping ad placement will evolve on Google is still unknown. What we do know is that the traditional model, whereby Google shows between 1 and 4 four ads above organic results, is impacted by SGE. 

Given the shake up to ad placements on Google, now is the time to invest in product feed optimization. This is to give your shopping campaigns every chance to remain visible and to stand out from competitor shopping ads. If search and organic listings are negatively impacted by SGE, make sure your feed is optimized for success.

  • Focus on decision stage in E-commerce buyer journey

Search Generative Experience aims to shorten the buyer journey for consumers in a big way. According to Malte Landwehr, it’ll decrease from 3 hours of consumer research spread over multiple days, to just one 15-minute journey on Google. 


Overall, this is good news for e-commerce and for Google Shopping because it may translate to fewer touchpoints before making a sale. 

How Google plans to do this with Search Generative Experience is by providing useful content that speeds up the decision-making process. Generative content is surfaced from websites with high authority and it’s tailored to different stages in the sales funnel, meaning the content will align with user intent.

It seems that SGE is being developed with e-commerce in mind so that AI-powered content doesn’t take away from researching and shopping on Google, but instead, it complements that process, making it more efficient. 

A study looking at the search terms that trigger generative content supports this, with “cost” triggering an SGE response 88% of the time and “buy” between 87% to 95% of the time. “Amazon”, one of the largest e-commerce platforms in the world, triggered an SGE response 79% of the time. These three search terms are associated with shoppers and so generative content is showing up to help that process. 

  • Shift to long-tail keywords

There has already been a shift towards longer-tail keywords in recent years regarding how users research and compare products and services on search engines. Voice search is also responsible for longer-tail keywords. 

However, conversational keywords are also on the rise, in particular with AI language models that are growing in popularity. The use of conversational keywords is expected to increase now that AI is being incorporated into search engines. 

Interestingly, SERanking found that keywords that contain more terms are more likely to trigger SGE results compared to shorter keywords. This indicates generative content is responding to longer-tail keywords such as those that are research-based by unearthing relevant content to help answer these queries. 


Source: Twitter

Having said that, for e-commerce, this correlation isn’t the case and instead generative content is equally likely to appear for long-tail keywords as it is for short-tail keywords. This aligns with the idea that SGE will match the search intent or a user, the stage of the funnel a consumer is in and it will aim to enhance buyer journeys. 

For example, “running shoes” or “best running shoes” are just as likely to trigger SGE content as longer tail keywords, such as “mens running shoes size 9” or “mens black saucony tempus running shoes size 9”. Content will be tailored to each search, matching user intent and their buyer journey stage. 

For advertisers, it also means greater emphasis on keyword research and fully understanding the search terms your audience uses at all stages of the funnel. Incorporating long-tail keywords into your SEO strategy is also an important step that businesses should now consider adopting to ensure content is optimized for SGE.

  • Reporting focused on conversion metrics rather than  Click-Through-Rate (CTR)

Search Generative Experience is expected to impact CTR and advertisers may begin to report lower CTRs from Google Ads. At first glance this may seem like a negative change to ad performance, however, that may not be the case. 

There are two main reasons why we may see a decrease in CTR from ads:

  • Firstly, AI-generated content is answering questions and responding to search queries directly on the search results page. As long as SGE content can effectively answer a query, it will reduce the number of users who then click on paid ads to find answers. This goes hand in hand with reducing buyer journeys.
  • Secondly, changes to ad placement could also impact CTR, with ads moving lower down the SERP. At the moment this may not impact shopping ads as much as it will search, which is good news for Google Shopping, since shopping ads continue to show above generative content the majority of the time.

The below example demonstrates how CTR may be impacted by SGE in both of the above cases. The search term “best running shoes for long distance” has generated AI content that takes up the full screen, answers the search query, provides links to running shoes as well as links to content for further research. 


Advertisers can adapt to a lower CTR by putting greater focus on other key metrics, which Google representatives are already encouraging. This is why lower CTR may not be a negative, provided other performance metrics are maintained. 

For example, metrics that are conversion-focused, which are arguably more important for e-commerce PPC anyway, should be where efforts are focused, such as conversion rate, cost per acquisition (CPA) and return on ad spend (ROAS). CTR will still be an important indicator of ad relevance and quality, however, adapting to changes that are a result of SGE is the key. 

  • Feed optimization more important than classic keyword research

Keyword research has changed and it continues to evolve. Ten years ago it was about bidding on specific, tightly managed keywords with a lot of emphasis on exact-match. Now there’s much less reliance on exact-match keywords. Instead, phrase-match and even broad-match, when used in a controlled way, are taking center stage. 

As well as that, there’s also been a movement towards feed-based advertising and adopting a more dynamic approach to ads. This is happening because of how far machine learning and AI has come in the past few years, along with how it’s being integrated into ad platforms to assist with targeting, optimization and creative development. Think Performance Max and Demand Gen campaign types. 

Going forward we could see this becoming even more prominent, making it crucial for websites and feeds to be fully optimized on a continual basis. Using a feed management tool like DataFeedWatch is the quickest and easiest way to adopt an optimization strategy that aligns with SGE optimization.  

Advertisers running Google Shopping or dynamic search ads (DSAs) will already know how important product feed and website content optimization are for this type of advertising to be successful. 

The impact Search Generative Experience will have on keyword research will only make these optimization strategies more important, as SGE works to bring in the most relevant content, whether it’s from a website or feed rather than simply using keywords. 

  • Conversational tone of Google ads copywriting 

Traditionally, PPC ad copy best practices have been to use concise, keyword-focused and USP-packed copy, to have the greatest Google Search impact. Google Ads character limits are notoriously short and with mobile devices growing in popularity, there’s a growing need to keep ad copy short. It must be tailored to fit mobile screens and critical information should come first. 

Search Generative Experience is set to disrupt the ad copy space by influencing writing style and tone of voice. Instead of a short, punchy and sales-driven approach, ad copy may need to adopt a more natural and conversational tone. This is driven by the trend moving towards conversational generative content, whereby salesy ad copy could feel unnatural when added to the mix. 

This impact challenges the way PPC advertisers currently write ad copy, making it important for writing style and tone of voice to be adapted when the time comes. Having said this, Google Shopping ads that are powered by product feeds are likely to remain less affected, however, the way product titles and descriptions are written may need to evolve.  

  • Store-visit ads and E-commerce most impacted by SGE 

Research suggests that Search Generative Experience has started to impact some industries a lot more than others. The most interesting insight about this for retailers is how ecommerce, as well as ‘in person visits’, i.e. people who are interested in physically visiting a place, are the most impacted. 

As Malte Landwehr reports, ‘in-person visit’ industries are impacted by SGE 98% of the time, whereas e-commerce industries are 95% of the time. This insight is in line with Google’s announcement on ensuring SGE compliments “commercial journeys'' and allows consumers to “take action and connect with businesses''. This revelation is reassuring for e-commerce because Google is consciously trying to enhance buyer journeys. 



Source: Twitter

SEO, medical, hotel and time-sensitive industries are reported to have shown generative content more than 70% of the time, meaning these industries are set to be impacted by SGE. At the other end of the spectrum, investing, finance and legal are three industries that show SGE content the least. 

Another study by ZipTie uncovered the top industries in terms of where SGE content is sourced from. Again, “e-commerce” and “marketplaces” feature near the top, along with the beauty, food and automotive industries, all of which are large in the retail space:

  • Beauty: 79%
  • E-Commerce: 79%
  • Marketplaces: 69%
  • Food: 65%
  • Automotive: 64%

As Search Generative Experience continues to roll out, the true extent of its impact on each industry will become clearer. For businesses operating in industries currently experiencing the most significant effects, now is the time to start preparing for the upcoming changes.

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What Google says about SGE

SGE continues to grow in popularity with two studies highlighting how often SGE results are triggered. In the earlier study, it was 40% of the time, however, more recently it’s 78% of the time. As Search Generative Experience is further developed and embedded into Google, it’ll only become more prevalent. 

With that in mind, Google representatives have been fairly quiet about the impact SGE will have on search marketing. During Alphabet’s earnings call at the end of 2023, Senior Vice President of Google, Philipp Schindler, had the following to say about SGE:

  • “As we shared last quarter, Ads will continue to play an important role in the new Search experience, and we’ll continue to experiment with new formats native to SGE.”
  • “SGE is creating new opportunities for us to improve commercial journeys for people by showing relevant ads alongside search results.”
  • “We’ve also found that people are finding ads either above or below the AI-powered overview helpful, as they provide useful options for people to take action and connect with businesses.”

Although it’s not heaps of insight, one promising takeaway is that ads will continue to play an important role in SGE and that “commercial journeys” are being considered, which is important for businesses that rely on Google search

Another insight is the potential for new ad formats in the future, with Google stating that they will continue to experiment with ad formats that are native to SGE. This could mean that any disruption to ads because of SGE will be offset by new ad formats that will integrate better within generative content. 

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Conclusion: what advertisers can do

Advertisers should stay up to date with the latest developments in Search Generative Experience. Being aware of how the search landscape evolves in the future will empower you to adapt your Google search strategy accordingly.

Once the effects of SGE become more apparent and widespread, the optimization of marketing efforts so that they align with generative AI will be an important step, especially for businesses that rely on Google Search, Shopping and SEO to generate sales.

With AI becoming increasingly embedded into our everyday lives, take inspiration from some of the best AI Advertising Examples of 2024 and what makes them successful. Or learn how to use AI to your advantage by standing out from the competition and connecting with your target audience through AI personalization


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