Artificial intelligence is changing how the internet sells attention. Meta is using smarter recommendations and automated advertising systems to grow its business. Google, meanwhile, is putting AI answers at the centre of Search, potentially reducing visits to external websites. But Google’s own advertising revenues are still growing. The real disruption is to where consumers discover brands, how advertising is measured and who captures value when an AI assistant answers a question.
2 November 2026 | Business & Technology | Source checks cover October 2026 earnings announcements and independently published research. Accompanying AI-generated image is illustrative, not a real advertising interface.
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Meta’s AI advertising machine is accelerating
Meta reported US$63.06 billion in third-quarter 2026 advertising revenue, compared with US$50.08 billion a year earlier. That is an increase of around 26%. Ad impressions rose 10% and the average price per ad rose 14%. Meta said investment in AI was helping deliver incremental revenue through better engagement, recommendation and monetisation. Read Meta’s financial results.
Meta’s business relies on showing people content they may not have specifically searched for. Better recommendations can keep audiences scrolling, while AI systems select advertisements and increasingly automate creative variations and campaign optimisation. Meta has described improvements to its ad-ranking models and AI-assisted advertiser tools, although not every advertiser will necessarily experience the same benefit. Meta’s AI advertising update.
Google Search faces a click challenge, not a revenue collapse
Alphabet reported US$63.35 billion in Google Search & other revenue for the same quarter, up from US$56.57 billion in 2025, or around 12%. Across Search, YouTube and its advertising network, Google advertising revenue was US$82.01 billion. Alphabet also said AI was helping stimulate query growth, including commercial queries. See Alphabet’s Q3 results.
Those results challenge the claim that AI has already devastated Google’s search business. Yet the economics for websites supplying information may be different: a user who gets a satisfactory AI answer may never open the original article, product review or business page. Search revenue and publisher referral traffic can move in different directions.
In a Pew Research Center analysis published in July 2025, researchers studied browsing activity from 900 U.S. adults in March 2025. People clicked a traditional search result on 8% of visits with an AI summary, compared with 15% of visits without one. Just 1% of visits with an AI summary resulted in a click on a cited source in that summary. This observational study is not a worldwide 2026 traffic measurement and does not prove AI caused every difference.
AI advertisements have arrived in Australia
On 28 October 2026, Google announced it was expanding ads within AI Mode to Australia, as well as Canada, India, New Zealand and other markets. Sponsored placements are labelled, and Google is exploring ads that can appear during follow-up AI conversations. This changes the advertising opportunity from a keyword search followed by links into a more interactive discussion about needs and possible purchases. Google’s announcement.
Google has also described experimental formats blending conversational shopping guidance and paid product placements. Their effectiveness and user acceptance will require continued measurement rather than assumptions about a guaranteed return. Google’s new AI Search advertising formats.
Five changes that could define the future of advertising
1. From keywords to conversations. A shopper could ask an AI assistant to compare family cars, refine a price limit and suggest suitable dealers. Sponsored options might appear at different stages of that conversation. The quality of the recommendation — and clear advertising disclosure — will matter.
2. Creative produced and tested by AI. Advertisers will increasingly generate variations of imagery, video and copy quickly. That can reduce production barriers for smaller businesses, but human review remains essential for correct product claims, rights to imagery, brand tone and accessibility.
3. Fewer steps between discovery and purchase. Assistants could recommend products, check availability, book services and eventually complete more transactions within a single environment. A business may have fewer opportunities to persuade users on its own website before the decision is made.
4. Less reliance on the click-through rate. As more brand encounters happen inside AI answers, businesses will need to focus on measurable sales, qualified enquiries, repeat customers and independent campaign testing rather than only traffic volume or last-click attribution.
5. Trust, privacy and disclosure become more valuable. Personalisation creates opportunities but also risks involving undisclosed paid recommendations, fake endorsements and sensitive profiling. Google has introduced additional disclosures showing when generative AI was used in ad creative. Google’s AI-ad transparency announcement.
What does this mean for publishers and Australian businesses?
News publishers may see fewer direct referrals when AI answers provide a summary of reporting that previously prompted a click. That could reduce display advertising impressions and affiliate income even where original journalism remains valuable. The effect will differ across subjects, publishers and audience behaviour.
For related reporting, read our explainer on Google paying major news publishers for AI content licensing.
For businesses, the practical response is diversification: maintain useful and reliable website content, publish original material, collect permission-based email subscribers, build direct customer relationships and evaluate search, social and AI-assisted discovery separately. No single platform should determine whether customers can find the brand.
Who will win — Meta, Google or AI assistants?
Meta’s quarterly advertising growth was faster than growth in Google Search & other, but those are not identical business segments. Google’s total advertising revenue of US$82.01 billion remained greater than Meta’s US$63.06 billion. Both companies could grow in different parts of the purchase journey: Meta through discovery in social feeds, Google through expressed intent, video and AI-assisted decisions. New assistants and commerce platforms may also compete for spending.
The next contest is not simply to win a search ranking or social feed impression. It may be to become the product, brand or service an AI assistant considers trustworthy enough to recommend.
What do you think? Would you trust a sponsored product suggestion inside an AI conversation, or would you rather visit independent websites to compare options? Tell us in the comments.
Sources and disclosure
Primary reporting sources: Meta Q3 2026 results; Alphabet Q3 2026 results; Pew Research Center, July 2025; Google AI Mode ads, October 2026; Meta AI ads update; Google AI ad formats; Google transparency update.
Disclosure: Prepared with AI assistance and checked against the linked sources. Forward-looking sections are editorial analysis and possible scenarios, not confirmed forecasts or investment advice. Company product-performance claims are attributed to those companies. Advertising results vary by advertiser, audience and market. The original AI-generated editorial illustration does not depict a real interface or existing sponsored campaign. Read the NextNews website disclaimer for general terms.
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