Google is testing advertising in AI Mode and, according to reporting by Search Engine Journal, the company has updated its privacy policy to add an exception related to ad personalisation. The report says ad experiences in AI Mode may be informed by data from connected Google services such as Gmail and Photos.

While the reported change appears to relate to how Google may use data within its own ecosystem, it is still significant for businesses that depend on Google for customer acquisition. Any change in how ads are matched, personalised or measured inside AI-driven search experiences can affect campaign performance, audience strategy and internal privacy reviews.

What happened

Search Engine Journal reports that Google is testing ads in AI Mode and that connected app data from services including Gmail and Photos may help shape those ads. The report also says Google has updated its privacy policy with an exception tied to ad personalisation.

Based on the source provided, this should be treated as a reported product and policy development rather than a new legal requirement. It does not, on its own, mean that all advertisers will immediately gain access to new user-level data, nor does it confirm how broadly the test is being rolled out across markets.

Why it matters for European businesses

For European companies, the immediate issue is not only advertising performance but also governance. Google remains a major channel for lead generation, e-commerce sales and brand visibility. If AI-driven ad placement increasingly relies on signals from connected services, businesses may see changes in how campaigns are targeted and how search intent is interpreted in AI interfaces.

This matters in several ways:

• Campaign performance may shift: AI Mode could change where and how ads appear, which may affect click-through rates, conversion patterns and reporting baselines.
• Targeting may become more opaque: If ad personalisation depends more heavily on platform-level signals, advertisers may have less direct visibility into what is driving results.
• Privacy scrutiny may increase: Marketing and legal teams in Europe may need to review whether their current documentation, consent language and vendor assessments still reflect platform practices that could influence ad delivery.
• AI search strategy becomes more important: Businesses already adapting to AI-led search experiences may need to align paid search, organic visibility and landing page strategy more closely.

Because privacy and advertising rules in Europe are stricter than in many other markets, companies should avoid assuming that a platform policy update automatically settles their own compliance position. A vendor change can still trigger internal review obligations, especially for regulated sectors or businesses with strict customer data policies.

Who may be affected

• E-commerce businesses that rely on Google Ads for product discovery and conversion.
• Marketing teams and agencies managing paid search, Performance Max or broader Google media budgets.
• SMEs that depend on Google as a primary acquisition channel and have limited room for sudden changes in ad efficiency.
• IT and privacy teams involved in vendor reviews, consent management or data governance.
• Regulated businesses that need tighter controls around customer data use, profiling and third-party platform risk.

What companies should consider

• Monitor AI Mode ad developments closely: Track official Google documentation and product updates before changing budgets or strategy.
• Review privacy and vendor documentation: Check whether internal records about advertising platforms, consent flows and data processing assumptions remain accurate.
• Prepare for performance volatility: If AI-driven placements expand, compare campaign results carefully against historical benchmarks rather than assuming continuity.
• Strengthen first-party measurement: Invest in clear conversion tracking, CRM alignment and landing page analytics so campaign evaluation does not rely only on black-box platform signals.
• Coordinate marketing and compliance teams: Businesses in Europe should ensure that advertising changes involving personalisation are reviewed jointly by marketing, legal and privacy stakeholders where appropriate.

For now, the reported development is most relevant as an early signal of how Google may combine AI search experiences with more personalised advertising. European businesses should watch for clearer rollout details, market availability and any official guidance on how these ad experiences operate in practice.