Google Search budgets draw scrutiny in buyer interviews

A November 2 report by Digiday, based on conversations with 18 media buyers, described closer scrutiny of Google Search budgets and discussions of possible reallocations. Alphabet reported $63.3 billion in Google Search and other advertising revenue for Q3 2026, up 12% year over year. The result and Google’s statements about AI Mode were discussed on Alphabet’s October 28 earnings call.

Search revenue grew as its growth rate slowed

The 12% increase compares Q3 2026 with the same quarter a year earlier. Google executive Philipp Schindler said foreign exchange was the largest factor in the slowdown in Search revenue growth from Q2 to Q3. He also cited retail and media-and-entertainment dynamics.

Schindler separately said faster growth in AI Mode queries had affected Search because AI Mode was generating less monetization. His comments describe a factor affecting growth, alongside the other factors he named.

What Google said about AI Mode ads

Google said most AI Mode queries were incremental, meaning they added queries rather than replacing existing Search activity. The company also said click-through rates were similar for sponsored and organic items in AI Mode product lists. Those engagement measures do not establish that each query generated the same advertising revenue.

On the October 28 call, Schindler said Google was scaling ads in AI Overviews and AI Mode to more users and queries, expanding AI Mode ads internationally for the first time, and adding multi-turn ads in the United States.

Buyer conversations describe scrutiny, not a measured industry-wide cut

Digiday’s report cited different budget estimates from people discussing client accounts. Lindsay Marty of Above the Bar Marketing said around 10% to 20% of Google budgets were being questioned in the relevant discussions. Bryce Hamlin of Power Digital described 10% to 30% of Search budgets as a possible reallocation discussed by marketers. These are separate accounts of budget questions and potential moves, not figures for completed cuts across the industry.

Some diversification under discussion could remain within Google’s advertising ecosystem. Digiday reported that Jellyfish’s Victor Batista characterized it as generally contained within Google, including possible movement toward AI Max, Performance Max, YouTube, or Demand Gen.