Paid search in Australia now competes within — not just below — Google's AI Overviews.

Paid Search Strategy 2026

Paid Search Pivots: Thriving Amid Google AI Overviews in 2026
- Strategies for Wollongong Businesses -

Q: How have AI Overviews impacted paid CTR in Australia?

[ANSWER REQUIRED — populate from page content before deployment]

Q: Do ads appear inside AI Overviews in Australia?

Yes — since October 2025, Google AU serves paid ads within AI Overviews via AI Max for Search and Performance Max campaigns. Eligibility requires high-quality asset groups and Broad Match keywords. Early AU tests report 2.5× CTR compared to traditional SERP ad placements.

Google AI Overviews dominating SERP above paid search ads 2026

Paid search in Australia now competes within — not just below — Google's AI Overviews.

Wollongong marketers are seeing paid CTR plummet as AI Overviews capture queries before ads load. In our audits of Illawarra campaigns, we've witnessed 60–70% drops in key verticals.

This guide shares five proven paid search pivots we've implemented for local clients — including how to get your ads inside AI Overviews, not just below them.

📍 Based in Keiraville, Wollongong 🎯 Serving Wollongong, Illawarra & Regional NSW ⚡ Data-Driven Paid Search Optimisation

Free Paid Search Audit

Free Google Ads account review + AI Overviews impact assessment + 90-day adaptation roadmap. No obligation.

Why Paid Search Marketers Must Pivot Now

Google's AI Overviews now dominate 79% of finance queries, 84% of retail comparisons, and major healthcare searches in Australia. This isn't a blip — it's structural. Safari Digital, 2026¹

For Illawarra SMBs relying on Google Ads, the impact is brutal: CTR down 68% on affected queries, CPC up due to fewer clicks chasing spend. DataSlayer, 2025² What this means for your Wollongong business: higher costs for qualified leads if you don't adapt.

In our work with local retailers and services, we've turned declining campaigns around by focusing on what AI can't touch — unique propositions, owned audiences, and now, placement inside AI Overviews themselves.

Paid search CTR collapse due to Google AI Overviews 2025 data

AI Overviews Penetration: The New Reality

AI Overviews hit critical mass in 2025, appearing on 79% of longer finance queries and 84% of retail comparisons Down Under. Adthena, 2025³ Retail outpaces finance and healthcare in AI adoption across EMEA, including AU markets. Lenovo, 2025

For Wollongong e-commerce and professional services, this means ads load below instant answers. We've seen Illawarra clients lose 50% impression share overnight.

What this means for your business: Audit GSC for AIO frequency on top queries. High penetration? Time to pivot beyond traditional bidding.

CTR Collapse and CPC Inflation Exposed

Paid CTR fell from 19.7% to 6.34% on AIO queries (June 2024–Sep 2025), with CPC inflating as spend grew 9% YoY, while clicks grew only 4%.

Google Search ad clicks hit 5-year highs in Q4 2025 thanks to AI, but inventory compression squeezes advertisers. LinkedIn, 2026⁴ AU benchmarks show average CVR up slightly, but CPA pressure mounts. TheAdSpend, 2026

In Illawarra, where budgets are tight, this hits hardest. Our clients report 45% CPC hikes on retail terms.

Practical step: Segment AIO-impacted campaigns in GA4 for targeted bid adjustments.

Google Ads CPC inflation and CTR drop 2025–2026 benchmarks

Compressed Funnels, Higher Quality Clicks

AI Overviews collapse 7–14-day journeys into a single session, shrinking retargeting pools while boosting CVR by 65% across industries. Woostify, 2026⁵

For Wollongong retailers, this pre-qualifies shoppers — fewer clicks, but more conversions. Net CPA rise? Just 3–4% for adapted accounts.

What this means: Shift budget from top-funnel to bottom-funnel Performance Max campaigns.

Pivot 1: Smart Informational Keyword Management

Audit 90 days of data and cross-reference GSC — brands cited in AIOs see a 91% CTR lift. Don't blanket-exclude informational terms; bid down selectively. Seer Interactive, 2025⁶

For Illawarra services, we've paused low-intent terms and reallocated budget to transactional keywords — ROI up 25%.

Action: Use Google Ads scripts to flag AIO frequency across your keyword set in bulk.

Pivot 2: Master Google Shopping Feeds for AI

Shopping Graph's 50 billion listings demand rich attributes — AI Mode surfaces only complete, detailed feeds. ACP Ready, 2024⁷

Wollongong e-commerce clients with optimised feeds report 40% gains in visibility post-AI rollout.

Pro tip: Prioritise GTINs, colours, and sizes — the attributes Illawarra retail buyers filter by most.

Google's AI now also prioritises listings with five or more product images and video content, with virtual try-on features integrated across Search, Shopping, and Images. For Wollongong retailers, this means product photography investment now directly impacts paid visibility — not just organic.

Google Merchant Centre feed attributes for AI Shopping

Pivot 3: Ads That Sell, Not Inform

Lead with unique value propositions, maximise extensions, and use RSAs for urgency and social proof — AI handles the informational heavy lifting now. Search Engine Land, 2025⁸

Our local tests show social proof headlines lifted CVR 18% in Wollongong campaigns.

Test this week: "Wollongong's #1 [Service] – Free Quote Today" vs your current generic headline.

Pivot 4: First-Party Data Supremacy

Customer Match and granular remarketing segments thrive as keyword targeting loses reliability. Customers.ai, 2024⁹

For privacy-focused AU, we've seen a 30% drop in CPA via CRM uploads for Illawarra clients.

Implement: Hashed list uploads weekly from your Wollongong CRM — this is the sustainable moat AI cannot disintermediate.

Pivot 5: Ads Inside AI Overviews (AU Update)

Since October 2025, Google AU has shown paid ads directly within AI Overviews — transforming the threat into an opportunity. Ads appear via AI Max for Search and Performance Max campaigns. Pattern, 2025¹¹

For Wollongong retailers, this means competing for prime placement in the AI answer itself — not just below it.

Two Placement Zones — Different Requirements:

Above & below AI Overviews: No changes needed — all existing Search, Shopping and PMax campaigns are already eligible automatically
Inside AI Overviews: Requires one of: AI Max for Search, Performance Max (keywordless targeting), Dynamic Search Ads, or Broad Match keywords
Ads are matched to both the user's query and the AI Overview content — making relevance signals more important than ever
Prioritise Smart Bidding + high-quality creative to maximise placement probability within the AIO itself

Early AU tests show 2.5× CTR vs traditional SERP ad placements. Illawarra action: Audit your PMax asset quality scores this week in Google Ads → Asset Report. Google Ads Help, 2026¹² Nicreated AU, 2026¹³

Frequently Asked Questions

How have AI Overviews impacted paid CTR in Australia? ▾

Paid CTR dropped 68% on affected queries between mid-2024 and late-2025, with ongoing pressure into 2026 as AIO penetration increases across finance, retail, and healthcare verticals.

Do ads appear inside AI Overviews in Australia? ▾

Yes — since October 2025, Google AU serves paid ads within AI Overviews via AI Max for Search and Performance Max campaigns. Eligibility requires high-quality asset groups and Broad Match keywords. Early AU tests report 2.5× CTR compared to traditional SERP ad placements.

Should Wollongong businesses pause informational keywords? ▾

No — audit your data first. Brands cited within AI Overviews see a 91% paid CTR lift. Selective bid adjustments preserve volume while protecting budgets; blanket exclusions can remove high-value terms.

Is Shopping safer from AI Overviews than Search? ▾

Yes, with rich feeds. AI Mode favours detailed product attributes — complete GTINs, colours, sizes, and accurate pricing boost visibility for optimised Wollongong retailers significantly over incomplete feeds.

Will conversion rates improve despite lower clicks? ▾

Yes — 65% of industry benchmarks show CVR gains as AI Overviews pre-filter intent, removing low-quality clicks. Well-adapted accounts are reporting a net CPA increase of just 3–4% despite significant volume changes.

How does Creative Orbit help with paid search pivots? ▾

We audit your Google Ads account against AIO impact, identify which campaigns need immediate pivots, and implement changes — including AI Max and PMax asset optimisation. Free initial review for Illawarra businesses, no lock-in contracts.

What's the timeline for seeing paid search ROI post-pivot? ▾

Feed and ad copy improvements typically show results within 2–4 weeks. Full audience and first-party data strategies take 60 days to build meaningful volume in Wollongong and Illawarra markets.

Ready to Pivot Your Paid Search?

Don't let AI Overviews erode your Wollongong ad ROI. Get our free audit to benchmark your campaigns against the five pivots above — and find out if you're eligible to appear inside AI Overviews right now.

Free Paid Search Audit Contact Wollongong Team

Based in Keiraville, serving Wollongong, Illawarra & Regional NSW.

Sources & References ▾

Paid Search Pivots: Thriving Amid Google AI Overviews in 2026- Strategies for Wollongong Businesses -