Paid search in Australia now competes within — not just below — Google's AI Overviews.
Paid Search Pivots: Thriving Amid Google AI Overviews in 2026
- Strategies for Wollongong Businesses -
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 observed 60–70% declines across 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.
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, and CPC up as fewer clicks chase 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 around declining campaigns by focusing on what AI can't touch — unique propositions, owned audiences, and now placement inside AI Overviews themselves.
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 a 45% increase in CPC on retail terms.
Practical step: Segment AIO-impacted campaigns in GA4 for targeted bid adjustments.
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, and integrates virtual try-on features across Search, Shopping, and Images. For Wollongong retailers, this means that product photography investment now directly impacts paid visibility — not just organic visibility.
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 becomes less reliable. 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.
- 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 in AI Overviews see a 91% lift in paid CTR. 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 significantly boost visibility for optimised Wollongong retailers compared to 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.
Based in Keiraville, serving Wollongong, Illawarra & Regional NSW.
Sources & References
- Safari Digital, 16 AI Overview Statistics Worth Knowing, 2026
- DataSlayer, AI Overviews Killed CTR 61%: 9 Strategies to Show Up, 2025
- Adthena, How Google's AI Overviews Are Accelerating Change in Paid Search, 2025
- LinkedIn, Google Search Click Growth Hits 5-Year High Q4 2025, 2026
- Woostify, How Google AI Overviews Are Reshaping the Buyer Funnel, 2026
- Seer Interactive, AIO Impact on Google CTR September 2025 Update, 2025
- ACP Ready, Google Merchant Feed Optimisation: The AI-First Guide, 2024
- Search Engine Land, How to Write High-Performing Google Ads Copy, 2025
- Customers.ai, Google Ads Customer Match: Using First-Party Data, 2024
- Search Engine Land, 4 Strategic Paid Search Pivots to Survive Google's AI Overviews, 2026
- Pattern AU, Google's AI Overview Ads: What It Means for Paid Search, 2025
- Google Ads Help, About Ads and AI Overviews, 2026
- Nicreated AU, Google Ads in AI Overviews: How to Show Up and Win, 2026