Preview|GOOG 4Q25: Agentic Commerce and Gemini Enterprise Drive New Growth
AI Overview/AI Mode, Agentic Commerce, Gemini Enterprise, TPU, GCP, AAPL
Before diving into our Q4 2025 GOOG preview, let’s review our past preview insights.
In Q1 2025, we first covered GOOG and highlighted a narrative shift in GOOG’s frontier model capabilities.
In our Q2 2025 GOOG preview, after extensive research with agencies and advertising technology experts, we found that AI Overview and AI Mode had not negatively impacted GOOG’s advertising business.
During the same period, we conducted deep research into GOOG’s TPU and OCS advantages in frontier model development.
In our Q3 2025 GOOG preview, we observed strong demand for TPU and GCP, and believed GCP business would reach 45% quarterly growth in CY2026.
In our Q4 2025 GOOG preview, we maintain our optimistic stance.
GOOG Preview
We recently spoke with over 10 experts and got updates on several key topics:
Q4 2025 overall advertising revenue trends
AI Overview & AI Mode
Google’s Agentic commerce strategy
Gemini Enterprise
On-device AI impact on Google
Other product developments
Quarterly outlook and projections
Overall Advertising Business Growth
We recently communicated with 5 GOOG advertising agency experts, all seeing Q4 advertising growth continuing to accelerate quarter over quarter from Q3.
North America Expert A manages over $100 million in annual omnichannel spending, with high concentration in e-commerce, gaming, and online services
“Advertiser confidence in the US economy has improved slightly. Three to six months ago, half my clients worried about recession, now it’s maybe 40%. Many advertisers also realize that even if their companies face difficulties, they need to spend more on marketing. I’m seeing channel retailers who, after closing unprofitable stores, increased ad budgets because they still want to sell in those regions without physical stores. Additionally, most companies are getting less free traffic because of GOOG AI. They need to buy more ads as free traffic declines. This became further consensus in Q4.”
“I wouldn’t be surprised if we have great numbers in H2 2026. I already have high expectations, but Google’s pace of improving search and search ads is accelerating.”
“Besides less free traffic, conversion rate growth is even more notable. Q4 2024 paid clicks up 8% YoY, conversion rate up 5.1% YoY, meaning 13.5% more conversions than last year. Q4 2025 paid clicks up 4.9% YoY, conversion rate up 12.9% YoY, meaning 18.4% higher conversions, clearly better than Q4 2024.”
The expert specifically mentioned future trends: “Two years ago, good e-commerce conversion rate was 5%, about one in twenty searches converting to paying customers. But after AI AMax, users do more sorting, filtering and thinking in search engines before visiting websites. One day conversion rate might be more like 15%, maybe 20%. Paid clicks might stay roughly flat over the next few years. I’m not very confident about that number, but I’m confident conversion rates will grow rapidly.”
North America Expert B is a global 4A agency executive with over $200 million in annual omnichannel budget, all in the US
“Q4 2025 GOOG budget met expectations, PMAX clearly helped performance and budgets.”
Asia Expert A manages about $100 million in annual omnichannel budget, with 80% e-commerce related. They explained why GOOG budget exceeded expectations
META clients migrating to other platforms, especially e-commerce and short drama clients, with lead generation clients (like automotive) showing similar trends.
Insurance clients starting to use more of GOOG’s Maximize Delivery for maximum audience reach.
AI capabilities like AIM and AIO respectively targeting search conversions and brand exposure conversions. After two quarters of continuous promotion, effects are notable. Many advertisers improved ad efficiency through these products by inserting recommendation slots in content.
Asia Expert B manages over $6 billion in annual omnichannel spending, mainly gaming and online services. Their Q4 2025 came slightly below expectations.
“Google has long held a dominant position with policies not friendly to agencies. Agencies generally strengthened support for Meta while moderately controlling Google spending. Also, while Google’s traffic costs are currently low, its combined ROI performance in gaming and mobile apps is relatively weak.”
“While its user acquisition capability is strong, given agencies’ difficulty profiting and clients’ ROI not matching past levels, caution is warranted. Google is adjusting through backend large models and optimizing Google Play network. We’ll observe subsequent effects. If they don’t improve agency policies and traffic value, cooperation will remain constrained.”
AI Overview & AI Mode
We surveyed several North American partner experts and saw AI mode penetration accelerating after introducing Gemini 3 flash, with increased user engagement time, though global user penetration remains below 10%. Google remains cautious about AI mode monetization, with ad monetization still in testing and full-scale rollout expected in H2 2026. AI overview accounts for about 30-40% of queries but has started using recycled results to save computing power.
