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Image Credit: State of Brand

Growth & Strategy

AI Is Squeezing Google Search, and Wall Street Just Noticed

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State of Brand is a trade publication covering brand strategy and category positioning for CMOs, brand strategists and marketing leaders. We report on the ideas, people and developments shaping brand strategy, category positioning, and how brands hold meaning as media fragments, with a particular focus on perspectives from the executives, operators and subject matter experts doing the work firsthand. Our readership is global and includes professionals at Fortune 500 companies and leading organizations across brand and marketing. Our goal is to give practitioners a useful place to learn from their peers and give experts a credible platform to contribute their experience to important industry conversations.

Q: Who do you interview, and why was I invited?

We regularly speak with senior executives, operators, practitioners, researchers and other subject matter experts whose experience is relevant to the topics we cover. Our editorial team proactively identifies potential contributors based on their professional expertise, experience and perspective. You do not need to be a customer of, partner to, or otherwise affiliated with any company to participate. Interviews are designed to surface useful firsthand perspectives rather than promote a product or company. For participants, they provide an opportunity to contribute to the conversation around their field, share lessons from their work, and build a published body of thought leadership around the subjects they know best. There is no fee to participate.

Q: Who publishes State of Brand?

State of Brand is published by Outlever, which produces it as one of its own media properties rather than on behalf of an outside sponsor. The articles and interviews are produced by the State of Brand editorial team. Experts are invited because their perspectives are relevant to our coverage, not because they have paid to appear. An interview invitation from State of Brand should therefore be understood as an invitation to contribute expertise to an editorial trade publication — not as a sales solicitation or paid placement.

Q: Where will my interview appear, and who will see it?

Your interview will be published on State of Brand, where it becomes part of our ongoing coverage of brand strategy and category positioning and can continue to be discovered and referenced after publication. Our audience includes CMOs, brand strategists and marketing leaders at organizations around the world, including professionals at Fortune 500 companies and other leading enterprises. We also make interviews easy to extend through professional networks. Contributors receive a shareable article link and professionally designed quote-card asset that can be used on LinkedIn, and stories may receive additional amplification through the publication, contributor networks and relevant professional communities. For many contributors, the value is not simply appearing in one article. It is having their expertise captured in a credible editorial format that can be shared with colleagues, customers, peers and their broader professional network.

Alphabet's search ads fell short of Wall Street's numbers on Wednesday while Google Cloud more than doubled. The gap between more searches and slower search revenue is where B2B demand-gen budgets are exposed.

ByState of Brand Editorial

Oct 28, 2026

Alphabet missed estimates for search, YouTube ads and operating income on Wednesday, and its stock fell more than 7% after hours. Searches on Google are growing faster than they have in five years, and search revenue is growing more slowly than it has all year.

If your company puts a meaningful share of its demand-gen budget into Google search ads, Alphabet's third-quarter report deserves a closer look than the stock chart.

Alphabet reported shortly after the market closed. Revenue rose 25% to $127.6 billion, just under the roughly $128.2 billion analysts expected, according to Reuters' consensus. Search and other revenue came in at $63.35 billion, about $1.5 billion below estimates. YouTube ads brought in $11.2 billion, about $200 million short, and operating income of $40.6 billion missed by roughly $2.6 billion. The stock fell more than 7% in after-hours trading.

The cloud side had a very different night. Google Cloud revenue rose 103% to $30.7 billion, about $2 billion ahead of what analysts expected. Microsoft, which reported at the same time, beat on revenue as Azure grew 48% to $33.2 billion, and its shares rose about 4%.

More people are searching, and Google is making less from it

Google's search revenue grew 12% this quarter. It grew 19% in the first quarter and 17% in the second.

In the same release, Google said search query growth is at its highest in five years, commercial queries included, and CEO Sundar Pichai said Google's AI investments are behind it.

That's a search business with more traffic and slower revenue growth. Alphabet's release doesn't explain the gap. We think AI Overviews and AI Mode are the likeliest reason. When Google answers the question at the top of the page, the searcher has fewer reasons to click on anything below it, ads included. Google hasn't said this, and one quarter doesn't prove it. But it's the most straightforward way to read more searches and less money, and investors read it the same way tonight.

Search is still paying for Google's AI build-out

Alphabet spent $51.4 billion on capital expenditures in the quarter and reported negative free cash flow of $9.1 billion, only the second negative quarter in its history as a public company. Cloud is growing fast enough to justify some of that. Search still generates most of the cash, which is why investors punished a $1.5 billion search miss harder than they rewarded a $2 billion cloud beat.

Some early posts tonight pointed out that Alphabet and Microsoft both spent less than analysts expected, by about $4 billion at Alphabet and roughly $6 billion at Microsoft. Don't read that as a retreat from AI. Microsoft recently changed how it accounts for some data center leases, which lowers its reported capex without changing its plans, and analysts expect Alphabet's spending to top $300 billion in 2027.

Our take

Don't pull money out of Google search over one quarter. Search is still growing, and Google says commercial queries are growing with it. But B2B marketers should plan for paid clicks to get scarcer and more expensive. If AI handles more of the early research questions on the results page, advertisers end up bidding for the clicks that remain, and those come mostly from buyers who already know what they want. Watch cost per click and impression share on your core terms through the first quarter of next year.

The bigger shift is where buyers get their answers. When a Google summary or a chatbot answers a buyer's question before an ad loads, the companies named in that answer get the attention, and nobody paid for the placement. Those answers are assembled from what's published about your category: reporting, expert commentary, customer stories, press coverage. Paid search is attention you rent one click at a time. Being the source those answers draw from is attention you own, and it keeps working after the campaign budget runs out. We made that case in our 2027 B2B marketing playbook, and tonight's numbers make it harder to put off.

Then fix your reporting before budget season. If more of the work happens on the results page, last-click attribution will make search look weaker than it is. Track branded search volume, direct traffic to the pages AI tends to cite, and pipeline from accounts you've never marketed to, as we suggested after ChatGPT's tracking bug earlier this month.

Alphabet reports again early next year. If search growth picks up over the holidays, tonight will look like an overreaction. If it slows again while searches keep climbing, the squeeze is real, and the marketers who spent this winter building an audience of their own will be glad they did.

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Frequently Asked Questions

What is State of Brand?

State of Brand is a trade publication covering brand strategy and category positioning for CMOs, brand strategists and marketing leaders.

We report on the ideas, people and developments shaping brand strategy, category positioning, and how brands hold meaning as media fragments, with a particular focus on perspectives from the executives, operators and subject matter experts doing the work firsthand.

Our readership is global and includes professionals at Fortune 500 companies and leading organizations across brand and marketing. Our goal is to give practitioners a useful place to learn from their peers and give experts a credible platform to contribute their experience to important industry conversations.

Who do you interview, and why was I invited?

We regularly speak with senior executives, operators, practitioners, researchers and other subject matter experts whose experience is relevant to the topics we cover.

Our editorial team proactively identifies potential contributors based on their professional expertise, experience and perspective. You do not need to be a customer of, partner to, or otherwise affiliated with any company to participate.

Interviews are designed to surface useful firsthand perspectives rather than promote a product or company. For participants, they provide an opportunity to contribute to the conversation around their field, share lessons from their work, and build a published body of thought leadership around the subjects they know best.

There is no fee to participate.

Who publishes State of Brand?

State of Brand is published by Outlever, which produces it as one of its own media properties rather than on behalf of an outside sponsor.

The articles and interviews are produced by the State of Brand editorial team. Experts are invited because their perspectives are relevant to our coverage, not because they have paid to appear.

An interview invitation from State of Brand should therefore be understood as an invitation to contribute expertise to an editorial trade publication — not as a sales solicitation or paid placement.

Does it cost anything to be interviewed or featured?

No. There is no fee to participate in an interview or to be featured in State of Brand.

We do not charge executives, subject matter experts, or their companies for editorial coverage. There are no placement fees, participation fees, required subscriptions, or other payments associated with being interviewed or included in an editorial feature.

Our editorial team invites contributors because their experience, expertise, or perspective is relevant to the subjects we cover — not because they have paid for exposure.

State of Brand is published by Outlever, which allows the publication to produce ongoing reporting and interviews without charging the experts who contribute to our coverage.

Participation also does not require you or your organization to purchase anything from, become a customer of, or enter into a commercial relationship with anyone.

If you have been invited to speak with State of Brand, the invitation is for an editorial interview at no cost to you or your organization.

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A member of the State of Brand editorial team will conduct a brief conversation, typically around 20 minutes, focused on the subject where your experience is most relevant. We then develop the conversation into an editorial feature for the publication.

Before publication, participants are given an opportunity to review the article and flag factual inaccuracies, quotation issues or important context that should be clarified.

Our goal is to accurately represent your perspective while keeping the process lightweight for busy executives and subject matter experts.

Where will my interview appear, and who will see it?

Your interview will be published on State of Brand, where it becomes part of our ongoing coverage of brand strategy and category positioning and can continue to be discovered and referenced after publication.

Our audience includes CMOs, brand strategists and marketing leaders at organizations around the world, including professionals at Fortune 500 companies and other leading enterprises.

We also make interviews easy to extend through professional networks. Contributors receive a shareable article link and professionally designed quote-card asset that can be used on LinkedIn, and stories may receive additional amplification through the publication, contributor networks and relevant professional communities.

For many contributors, the value is not simply appearing in one article. It is having their expertise captured in a credible editorial format that can be shared with colleagues, customers, peers and their broader professional network.

More people are searching, and Google is making less from it

Search is still paying for Google's AI build-out

Our take

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