AIuthority

Google AI Overviews Are Driving Down Paid Search CTR and Revenue

By Charles Ryder

I’ve spent most of my career treating Google Search like a relatively stable marketplace: you bid, you rank, you earn clicks—then you optimize your way into better economics. Google AI Overviews (AIO) breaks that model in plain sight. This isn’t a subtle shift. The data points to a real hit to click-through rate (CTR), a knock-on increase in costs, and—most painfully—a revenue problem for advertisers who depend on paid search volume.

Here’s what’s happening, why it’s happening, and what marketers should do next.

Timeline illustrating the evolution of Google's Search Generative Experience (SGE) to permanent AI Overviews (AIO) and their broad rollout. A quick timeline: from SGE to “permanent” AI Overviews

AI Overviews didn’t appear out of nowhere. Google built them in the open:

  • May 2023: Google introduces the Search Generative Experience (SGE) in Search Labs—an experimental generative layer designed to answer more complex queries.
  • May 14, 2024: At Google I/O, SGE is rebranded as AI Overviews and rolls out broadly in the U.S. Early results are turbulent (some very wrong answers go viral), but Google iterates fast.
  • Late 2024: Expansion accelerates—AI Overviews roll out across 100+ countries/territories, and coverage expands to more query types.
  • 2025–early 2026: Independent datasets (notably Seer Interactive and Adthena, reported by Search Engine Land) put numbers behind what many advertisers were already seeing: CTR falls sharply when AIO sits above traditional results and ads.

At this point, AIO isn’t a “test” in any meaningful sense. It’s a structural change to the SERP.

The headline impact: paid CTR is getting crushed

The cleanest signal comes from Seer Interactive’s analysis of informational queries tracked from a June 2024 baseline through 2025. When AI Overviews are present, performance shifts dramatically:

  • Paid CTR dropped from 19.7% to 6.34% (a 68% decline) on queries where AIO appeared.
  • Organic CTR dropped from 1.76% to 0.61% (a 61% decline) on those same AIO-present queries.

Informational searches were already trending toward “low click.” AI Overviews harden that trend by answering the question directly while pushing everything else farther down the page.

Adthena’s large-scale SERP analysis adds important nuance: when AIO appears above paid ads, advertisers can see 20–40% relative CTR drops. That’s not noise. It forces changes in forecasting, budgeting, and channel expectations.

Why this is happening: the “above the fold” economy has changed

Paid search has always been a visibility auction. With AI Overviews, visibility isn’t vanishing—it’s being reordered.

  1. AIO takes prime real estate
    AI Overviews often sit at the top of the page with a summary and links. On mobile, that block can dominate the entire first screen. Ads may still be there, but users get a lot more “answer” before they ever see them.

  2. The buyer journey gets compressed
    For “how to,” “best X,” and comparison queries, the SERP becomes a self-contained research session. Users don’t need to click multiple sites to form an opinion—and that cuts both organic and paid traffic.

  3. The SERP becomes more volatile by intent and industry
    Adthena found high AIO prevalence in categories like finance and retail (especially on longer queries). Meanwhile, verticals such as telecom and tech show persistent performance gaps—effectively turning AIO into a “visibility tax” for certain segments.

Graph showing the dramatic decline in paid and organic CTR on Google Search results when AI Overviews are present, highlighting the impact on visibility. The revenue problem: CPC inflation meets volume loss

CTR decline is only the first domino. The second is cost.

When fewer people click, advertisers often do what they’ve always done: raise bids to protect position and volume. But if the constraint isn’t rank—and it’s simply that AIO is absorbing attention—higher bids can turn into an expensive reflex.

The economics can look like this:

  • You used to get 1,000 clicks at $2 CPC.
  • Now AIO suppresses demand and you get 700 clicks, while competitive pressure nudges CPC up (say to $2.90).
  • Your volume drops, your cost per acquisition rises, and the margin squeeze shows up quickly—especially in categories where paid search was already expensive.

Some accounts are seeing higher conversion rates (because the remaining clickers may be more pre-qualified). But often, the conversion-rate lift doesn’t make up for lost click volume. Better efficiency on a smaller pool of traffic can still mean lower total revenue.

The new “winner-take-more” dynamic: being cited matters

One of the most sobering findings: brands cited inside AI Overviews can benefit disproportionately.

Seer’s work suggests that when a brand is referenced/cited, performance can swing meaningfully—reported as major lifts in paid and organic click performance versus periods when they’re not included.

That adds a new competitive layer on top of SEO and PPC:

  • It’s no longer only “rank #1” or “hold top impression share.”
  • It’s “be one of the sources the model chooses to quote.”

Because AIO operates like a pre-click decision engine, citation becomes influence.

What I’d do right now: four practical pivots

If you’re managing paid search budgets in 2026, bid tweaks won’t solve this. The teams holding up best are making strategic shifts. These are the four I’m prioritizing.

1) Separate keywords by AIO exposure, not just intent

Stop treating “informational” as one catch-all bucket. Break queries into:

  • Queries where AIO appears frequently
  • Queries where it rarely appears
  • Queries where AIO appears above ads (worst case)

Then change bidding rules accordingly. In many cases, the right move is to bid down on high-AIO queries and reallocate budget to segments that can still produce reliable click volume.

2) Build campaigns for the post-click reality (pre-qualified, lower volume)

If the top of the funnel shrinks, your landing pages and offers need to do more with less. Tighten:

  • Message match
  • Proof and differentiation
  • Conversion friction

When clicks are scarcer, every wasted click hurts more.

3) Treat creative as a counterweight to “AI summary sameness”

When the SERP is dominated by an overview, your ad needs contrast. Prioritize:

  • Clearer unique value propositions
  • Stronger extensions
  • Concrete claims (shipping time, warranty, pricing transparency, outcomes)

The era of generic “Best Solutions for X” copy is fading—AI Overviews already sound like that.

4) Shift targeting power to first-party audiences

As AIO changes query behavior, leaning harder on:

  • Customer Match / CRM lists
  • Remarketing (where allowed)
  • Performance Max and Demand Gen (with strong guardrails)

…can stabilize volume by reducing dependence on top-of-funnel informational queries that AIO is most likely to absorb.

My bottom line

Google AI Overviews aren’t just another SERP feature. They reallocate attention—away from organic listings and paid ads and toward Google’s generated answer layer. The numbers are too consistent to shrug off: paid CTR declines of 20–40% in many contexts, and as high as 68% on tracked informational queries, with real revenue fallout.

If you’re still judging success mainly by impression share or average position, you’ll keep getting surprised. The job now is to measure AIO presence, AIO placement, citation opportunity, and the downstream effects on clicks, CPC, and total conversions—then rebuild spend strategy around what still produces traffic.

Keeping up with these shifts takes better monitoring, faster analysis, and clearer decision rules than most teams can manage in spreadsheets. If you want a practical way to stay ahead of AIO-driven volatility, use a toolset built for this new search reality. AIuthority makes it easier to track what’s changing, pinpoint where CTR and revenue are leaking, and act before your budget gets quietly taxed by the new SERP.