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Paid search is facing one of its most significant shakeups in over a decade—and it’s coming from the rise of Google’s AI Overviews. These generative summaries are taking up more real estate on the search results page, and with that comes a drop in ad visibility, particularly in industries that rely heavily on high-volume keywords and transactional intent.
At Next Level Marketing Agency, we’ve been watching this shift closely across our clients in retail, healthcare, finance, and local services. The trend is clear: AI Overviews are no longer just a top-of-funnel curiosity. They’re influencing mid- and bottom-funnel performance, crowding out both paid and organic results, and changing how users interact with the SERP.
Let’s unpack what’s really happening—and what you can do about it.
AI Overviews Are Compressing the Funnel
When Google first rolled out AI Overviews, they mostly appeared on long-form informational queries—things like “how to compare mortgage rates” or “what is a hybrid car.” That’s changing. AI answers are now being triggered by much shorter, high-intent search terms—the very queries advertisers build their paid search strategies around.
That means Google’s AI isn’t just guiding early research; it’s competing directly with ad placements that were once the primary source of traffic and conversions. This compression of the buyer funnel is especially concerning for businesses that rely on bottom-funnel search ads to drive leads and sales.
CTR Is Taking a Hit
Recent analysis across millions of search results shows a sharp decline in click-through rates for paid ads on queries where AI Overviews appear. Depending on the industry, paid CTRs may be down as much as 8–12 percentage points. That’s not just noise—that’s a major shift in performance metrics that can affect ROI across the board.
If you’ve noticed fewer impressions, higher CPCs, or a dip in leads despite solid campaign setups, this could be the reason. It’s not your ad—it’s the SERP that’s evolving.
Some Industries Are Hit Harder Than Others
Not all industries are feeling the impact equally. Here’s a breakdown of how AI Overviews are expanding by vertical:
- Finance and Retail: Seeing the fastest growth in AI Overviews, especially on comparison-style queries. These industries rely heavily on keyword dominance for conversions, making the disruption more acute.
- Healthcare: One of the most saturated categories. Even short, one-to-three word queries are triggering AI responses, making it harder for ads to stand out—though longer queries have seen slight pullbacks.
- Travel: AI Overviews are beginning to replace booking-related ads in planning searches. Expect continued disruption on queries related to trip timing, destinations, and accommodations.
- Automotive: Impact is still moderate, but gaining ground, especially for product discovery and model comparisons.
The takeaway? Even if your industry hasn’t been heavily affected yet, it’s likely a matter of time.
What This Means for Paid Search Strategy
So what can you do now to adapt? First, don’t panic—but don’t stand still either. There are strategic shifts you can make to stay competitive in the AI-shaped SERP:
- Monitor AI Overviews in Your Space
Identify which of your target keywords are being affected. Tools like SEMrush or custom reporting dashboards can help, but you also need to understand your specific industry nuances. - Refine Your Ad Copy
If AI is taking over the “explainer” space, make sure your ad copy focuses on urgency, promotions, location, or specific benefits that AI can’t replicate. - Double Down on High-Intent Terms
If you’re in a vertical where AI isn’t dominating bottom-funnel searches yet, capitalize on that window. Focus budget on queries that still produce strong ROIs. - Invest in Upper-Funnel Content
Since AI Overviews lean on educational and comparison content, make sure you’re publishing blogs, guides, and product/service comparisons that feed the AI model and build brand familiarity—even if they don’t lead directly to a sale. - Adapt Landing Pages for AI Discovery
Structure your content with clear, factual sections that AI can parse easily. Schema markup, FAQs, and authoritative sourcing matter more than ever. - Get Ahead of the Competition
If your competitors aren’t optimizing for AI-driven visibility, now’s your chance to dominate both the organic and paid spaces by aligning your content strategy with how search is actually evolving.
We’re Entering a New Phase of Paid Search
The Google SERP is no longer a static set of ten blue links and four ads. It’s a dynamic interface shaped by AI, intent modeling, and generative content. The days of purely bidding your way to the top are fading. Instead, success will come from blending smart ad placement with the kind of content that earns a spot in both AI Overviews and traditional results.
The key is understanding how your visibility is shifting—and building a proactive strategy that adjusts before your performance metrics take a bigger hit.
Stay Visible, Stay Competitive
At Next Level Marketing Agency, we’re helping our clients navigate the changes happening across both AI-driven search and paid platforms. Whether you’re running Google Ads, investing in SEO, or trying to improve your content strategy, we’re here to help you stay ahead of the curve.
Want a deeper look into how AI Overviews might be affecting your ad performance? Book a free strategy session with our team and let’s build a smarter path forward together.
