Google Ads Chief Unveils AI Mode & Expanded UCP
▼ Summary
– Google’s annual letter outlines plans to integrate advertising, commerce, and AI across its platforms like Search, YouTube, and Gemini in 2026.
– The Universal Commerce Protocol (UCP) now enables purchases from Etsy and Wayfair in the U.S. and is described as a foundation for broader agentic commerce.
– Google is testing new AI Mode ad formats, including sponsored retailer highlights and expanding Direct Offers to include loyalty benefits and product bundles.
– New AI-powered tools are being developed to match brands with YouTube creators based on content and audience analysis.
– Google reports significant growth in AI-generated ad assets and claims its AI Max tool is unlocking billions of new searches for advertisers.
In her third annual industry letter, Google’s Vice President of Ads and Commerce, Vidhya Srinivasan, has detailed the company’s strategic vision for 2026, focusing on the deep integration of advertising, commerce, and artificial intelligence across its core platforms. The roadmap emphasizes creating seamless connections between Search, YouTube, and Gemini, aiming to transform how consumers discover and purchase products. This vision builds upon several key initiatives previewed earlier in the year, signaling a significant shift toward more automated and intelligent commercial experiences.
A central component of this strategy is the Universal Commerce Protocol (UCP), which is now actively processing purchases from major retailers like Etsy and Wayfair for U.S. customers using AI Mode. Since its introduction, Google reports strong interest from hundreds of leading technology firms, payment providers, and retail brands. The company envisions UCP as more than a retail tool; it is positioned as the essential foundation for agent-driven commercial interactions across numerous industries, enabling a unified checkout experience.
Within AI Mode, Google is experimenting with novel advertising formats designed to enhance the shopping journey. One test involves highlighting retailers offering products relevant to a user’s search query, with clear “sponsored” labels. This approach aims to provide shoppers with convenient buying options while giving brands valuable visibility during the consideration phase. Additionally, the Direct Offers pilot program, which allows businesses to present personalized promotions in AI Mode, is set to expand. The program will soon include loyalty benefits and bundled product offers, moving beyond simple price discounts.
The letter also underscores the growing importance of digital creators in the commerce ecosystem. Citing YouTube creators as highly influential tastemakers, Google is developing new AI-powered matching tools. These tools analyze content and audience data to connect brands with the most suitable creator communities for partnership campaigns. This initiative builds on existing “open call” features and represents a focused effort to leverage creator authenticity for commercial impact.
On the creative front, Google has observed substantial growth in the use of its AI tools for generating advertising assets. Internal data indicates a threefold increase in Gemini-generated assets during 2025, with the final quarter alone producing nearly 70 million assets for AI Max and Performance Max campaigns. The company has also integrated its advanced Veo 3 video generation tool into the Google Ads Asset Studio, alongside other creative utilities like Nano Banana.
Regarding campaign performance, Srinivasan states that the AI Max product is successfully accessing billions of entirely new search queries that were previously unreachable by advertisers. Introduced as an expansion tool for Search campaigns, its early results were a notable topic during Google’s recent quarterly earnings discussion.
This annual communication synthesizes various announcements into a cohesive strategic picture. It positions the current year as a pivotal moment where agentic commerce transitions from theoretical concept to practical reality, with UCP serving as the critical link between shopping, payments, and AI agents. For marketers, the evolution of Direct Offers and new ad format tests in sectors like travel are key developments. For online merchants, the confirmed integration with Etsy and Wayfair demonstrates UCP’s operational viability with established retailers.
However, several practical questions for sellers remain open, including specifics around Merchant Center controls, opt-in procedures for new features, and detailed performance reporting. The letter did not provide specific launch timelines for features slated for later in 2026. Industry observers anticipate more detailed announcements will likely be made at Google Marketing Live, the company’s premier annual advertising event held each spring.
(Source: Search Engine Journal)
