This is the biggest step Google has made so far at monetising AI Mode – sponsored ads are now being mixed with organic results.
Previously, sponsored results only had the ability to show at the end of the response, either within a carousel of sponsored products or appearing as a link card preview, as shown.
This is a change that was announced at Google Marketing Live a few days ago and covered by
@rustybrick as the new "Highlighted Answer Ads", and I'm now seeing them live within AI Mode for several queries.
There is also a different type of ad called "Coversational Discovery Ads", which can also display within the AI Mode output, with the example shown by Google seemingly showing the ad as showing at the end of the response.
The big difference in the formatting of the ads and the free listing results that sit both above and below is that the ads go directly to the product page URL, whereas clicking the free listing results opens the standard product grid with a selection of retailers (being a less direct traffic mechanism).
This is the biggest step that Google has made so far at monetising AI Mode, because users could easily not see the subtle "sponsored" label and treat it as a reputable recommendation from the list of items within the output.
Link in the comments to more examples of the new Highlighted Answer Ads in the wild, and make sure to subscribe to my newsletter, where I'll be giving a rundown of this change and the other impactful updates from this month.