[ Simon Bayliss ](https://creativeorbit.com.au/contact-about)    01 March 2026    Last Updated: 14 June 2026

  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 -

 ![Google AI Overviews dominating SERP above paid search ads 2026](https://creativeorbit.com.au/images/2026/blog-2026/google-ai-overviews-serp-paid-ads-2026.webp)**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.

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

[Free Paid Search Audit](https://creativeorbit.com.au/index.php?Itemid=738)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, 2026](https://www.safaridigital.com.au/blog/ai-overview-aio-statistics/)[1](#ref-1)

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, 2025](https://www.dataslayer.ai/blog/google-ai-overviews-the-end-of-traditional-ctr-and-how-to-adapt-in-2025)[2](#ref-2) 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.

 ![Paid search CTR collapse due to Google AI Overviews 2025 data](https://creativeorbit.com.au/images/2026/blog-2026/bar-graph-2.png)

   ## 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, 2025](https://www.adthena.com/resources/blog/how-googles-ai-overviews-are-accelerating-change-in-paid-search/)[3](#ref-3) Retail outpaces finance and healthcare in AI adoption across EMEA, including AU markets. [Lenovo, 2025](https://news.lenovo.com/pressroom/press-releases/emea-ai-success-by-industry/)

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, 2026](https://www.linkedin.com/pulse/google-search-click-growth-hit-5-year-high-q4-2025-thanks-ai-brbdc)[4](#ref-4) AU benchmarks show average CVR up slightly, but CPA pressure mounts. [TheAdSpend, 2026](https://theadspend.com/benchmarks/google-ads-search-overall)

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.

 ![Google Ads CPC inflation and CTR drop 2025–2026 benchmarks](https://creativeorbit.com.au/images/2026/blog-2026/ctr.png)

   ## 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, 2026](https://woostify.com/google-ai-overviews-reshape-buyer-funnel/)[5](#ref-5)

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, 2025](https://www.seerinteractive.com/insights/aio-impact-on-google-ctr-september-2025-update)[6](#ref-6)

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, 2024](https://www.acpready.com/google-merchant-feed-quality-optimization-ai/)[7](#ref-7)

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.

 ![Google Merchant Centre feed attributes for AI Shopping](https://creativeorbit.com.au/images/2026/blog-2026/google-merchant-center-feed-attributes-ai-shopping.png)

   ## 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, 2025](https://searchengineland.com/write-high-performing-google-ads-copy-generative-ai-459821)[8](#ref-8)

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, 2024](https://customers.ai/blog/customer-match-google-ads)[9](#ref-9)

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, 2025](https://au.pattern.com/blog/google-ai-overviews-ads/)[11](#ref-11)

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, 2026](https://support.google.com/google-ads/answer/16297775)[12](#ref-12) [Nicreated AU, 2026](https://www.nicreated.com.au/google-ads-ai-overviews)[13](#ref-13)

   ## 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.

[Free Paid Search Audit](https://creativeorbit.com.au/index.php?Itemid=738) [Contact Wollongong Team](https://creativeorbit.com.au/contact)

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

   Sources & References ▾1. [Safari Digital, 16 AI Overview Statistics Worth Knowing, 2026](https://www.safaridigital.com.au/blog/ai-overview-aio-statistics/)
2. [DataSlayer, AI Overviews Killed CTR 61%: 9 Strategies to Show Up, 2025](https://www.dataslayer.ai/blog/google-ai-overviews-the-end-of-traditional-ctr-and-how-to-adapt-in-2025)
3. [Adthena, How Google's AI Overviews Are Accelerating Change in Paid Search, 2025](https://www.adthena.com/resources/blog/how-googles-ai-overviews-are-accelerating-change-in-paid-search/)
4. [LinkedIn, Google Search Click Growth Hits 5-Year High Q4 2025, 2026](https://www.linkedin.com/pulse/google-search-click-growth-hit-5-year-high-q4-2025-thanks-ai-brbdc)
5. [Woostify, How Google AI Overviews Are Reshaping the Buyer Funnel, 2026](https://woostify.com/google-ai-overviews-reshape-buyer-funnel/)
6. [Seer Interactive, AIO Impact on Google CTR September 2025 Update, 2025](https://www.seerinteractive.com/insights/aio-impact-on-google-ctr-september-2025-update)
7. [ACP Ready, Google Merchant Feed Optimisation: The AI-First Guide, 2024](https://www.acpready.com/google-merchant-feed-quality-optimization-ai/)
8. [Search Engine Land, How to Write High-Performing Google Ads Copy, 2025](https://searchengineland.com/write-high-performing-google-ads-copy-generative-ai-459821)
9. [Customers.ai, Google Ads Customer Match: Using First-Party Data, 2024](https://customers.ai/blog/customer-match-google-ads)
10. [Search Engine Land, 4 Strategic Paid Search Pivots to Survive Google's AI Overviews, 2026](https://searchengineland.com/paid-search-pivots-google-ai-overviews-470193)
11. [Pattern AU, Google's AI Overview Ads: What It Means for Paid Search, 2025](https://au.pattern.com/blog/google-ai-overviews-ads/)
12. [Google Ads Help, About Ads and AI Overviews, 2026](https://support.google.com/google-ads/answer/16297775)
13. [Nicreated AU, Google Ads in AI Overviews: How to Show Up and Win, 2026](https://www.nicreated.com.au/google-ads-ai-overviews)