Retail: how advertising on Google is changing with AI
Date
15 September 2025
Today’s Retail consumers move seamlessly through their purchase journey, navigating four key – yet non-linear – moments: shopping, searching, streaming and scrolling.
According to Google internal data, Search remains the preferred digital channel in this journey: it is used daily by over 2 billion people worldwide, and around 15% of all queries are completely new. This highlights how consumer curiosity and needs are constantly evolving in complexity.
Alongside Search, YouTube plays a crucial role. With a 10.8% share of total streaming watchtime (Nielsen, November 2024), it is the most widely used video platform, particularly among younger generations. For Gen Z, for example, YouTube is the number one destination for high-quality content.
To manage these multiple touchpoints effectively, retailers need advertising strategies capable of capturing intent and driving conversion at every stage of the decision-making process. This is where Google AI comes in – optimising campaigns and unlocking new opportunities for Retail advertising.
What we will cover in this article:
Google AI transforms Search and boosts retailers’ ROAS
One of the most significant shifts in advertising over the past year has been the introduction of Google AI Overviews in Search, enriching the user experience and enhancing visibility opportunities for retailers’ products.
These AI-powered results now reach over 1 billion users each month across more than 100 countries, driving increases in both clicks and revenue for early adopters.
What’s more, Google Ads conversion lift studies in the US (2021–2024) confirm that AI-powered Search continues to deliver strong performance compared to other platforms.
YouTube and CTV as a key showcase for Retail
If Search is where intent and interest are born, YouTube is where meaning and deeper connections are built. Within the video landscape, YouTube leads the way for both ad-supported watchtime and reach on CTV (Comscore, January 2025).
These are critical data points for retailers aiming to dominate the biggest screen in the home and reach diverse audiences.
In addition, YouTube Shorts is the only short-form platform that bridges mobile and TV screens, recording more than 70 billion daily views (YouTube internal data, 2023).
In markets like the UK, 42% of Shorts viewers aged 18–44 are not on TikTok, making YouTube a uniquely powerful lever for brands seeking visibility.
Demand Gen and Performance Max to maximise data and creativity
Visibility is essential – but so is the ability to convert demand.
This is where Demand Gen and Performance Max campaigns come into play, integrating data and creativity into a unified advertising ecosystem.
A 2024 Nielsen study commissioned by Google found that adding Demand Gen to Search and Performance Max campaigns lifts ROAS by 10% and sales effectiveness by 12% (averages, of course, not guarantees for every case).
Complementing this are opportunities from Broad Match and Smart Bidding, which expand visibility on Search and drive improvements in both ROAS and sales effectiveness. While some advertisers perceive these tools as a loss of control – and to a degree, that’s true – our role is precisely to embrace platform evolutions and manage them with expertise.
Omnichannel Retail: the importance of data and local signals
Despite the widespread growth of online shopping, physical retail remains crucial: 58% of customers still prefer to shop in-store (Google/Kantar, 2023).
Here, data intelligence makes the difference. Retailers combining Local Inventory Ads with Shopping campaigns report significant uplifts: +21% in-store visits and +9% online conversions for products available in-store.
Moreover, those implementing omnichannel Smart Bidding achieve higher offline conversions at the same cost per action (Google Data, 2024), proving that integrated, data-driven investment is the key to thriving in the omnichannel retail era.
AI and data for more effective, scalable Retail marketing
With much of the online purchase journey running through Google and YouTube, AI and data interpretation have become essential tools for building effective and scalable marketing strategies in Retail.
Google AI, YouTube, Demand Gen, Performance Max and Omnichannel Smart Bidding are now pivotal levers to transform every stage of the customer journey into an opportunity for connection and conversion.
In the age of AI and data, the brands that engage customers first are the ones that win Retail.
Want to harness AI to grow your Retail business?
At SAY, we help brands translate technology, insights and creativity into campaigns that truly deliver. From the strategic use of data to integrated advertising solutions across Google and YouTube, we know how to guide you through an ever-evolving ecosystem.
Get in touch to explore how we can grow your results together.
