Hidden in Plain Sight: Understanding Consumer Responses and Ad Recognition of Sponsored Content in Search Engine Gen-AI Overviews

Maggie Liao, Yuan Sun, and Nathaniel Evans, “Hidden in Plain Sight: Understanding Consumer Responses and Ad Recognition of Sponsored Content in Search Engine Gen-AI Overviews”. Paper Accepted to the American Academy of Advertising Annual Conference, Austin, March 26-29, 2026. Abstract: The rapid integration of generative AI into search platforms is reshaping online advertising and consumer journeys in finding relevant information about a brand. As tools like Google’s AI Overviews synthesize information directly in search results, they not only streamline user experiences but also reduce engagement with traditional paid and organic search listings. In response, search engines have begun embedding sponsored content within these AI-generated summaries. Will consumers recognize ads when they appear in AI overviews? Guided by persuasion knowledge theory, this study presents one of the first empirical examinations of user reactions to sponsored content in AI overviews. Through a 2 (sponsorship disclosure: present vs. absent) × 4 (ad position) online between-subjects experiment (N=303), we find that ads placed within AI overviews are less likely to be recognized, even with disclosure, and this lower ad recognition further predicts higher purchase intention. These findings highlight the need to update our understanding of consumers’ persuasion knowledge in the Gen-AI era and underscore the strategic importance of ad placement in generative AI-powered search environments.