This week at I/O 2026, Google did something we all knew was coming. It rebuilt Search around AI from the search box out. And in doing so it changed the economics of every paid search dollar that runs through its system. After more than two decades watching advertising platforms evolve, I can tell you these moments are rare. The last time Google touched the Search box this aggressively, the iPhone had not been released. So when Liz Reid, the VP of Search at Google, called this “the biggest upgrade to our Search box in over 25 years,” that was not marketing language. That was an honest description of what just happened.

For small and mid-sized businesses, who together make up the overwhelming majority of advertisers on Google’s platform, the question is not whether this matters. It definitely does matter. The question is what to actually do about it before the change works its way fully through your campaigns, your conversion rates, and your media budget. Here is my read.

What Actually Changed

Three things shipped that every advertiser should understand. First, AI Mode is no longer the future of Google Search. It is the present. Google announced that AI Mode has crossed a billion monthly users in just one year. Queries more than double every quarter, and is now powered globally by Gemini 3.5 Flash as the default model. Second, Google rebuilt the Search box itself. It is now an intelligent, dynamically expanding input that accepts text, images, files, video, and even open Chrome tabs as part of a single query. Third, Google introduced what it is calling Search agents. Background information agents that monitor the web around the clock, agentic booking for local services like home repair and beauty, and generative UI that can build custom dashboards and mini-apps on the fly using Antigravity, Google’s new agentic platform.

Sitting on top of all of that, in advertising terms, is something that has not yet gotten the headlines it deserves. Ads are now eligible to appear above, below, and inside AI Overviews. And Google is in the middle of retiring Dynamic Search Ads in favor of AI Max. Eligible campaigns will migrate automatically over the course of the summer. Call-only ad creation is already shut off, with full sunset coming in early 2027. The plumbing under the hood is being replaced at the same time the user-facing experience is being rewritten.

Why This Is a Bigger Deal for Small Businesses Than for the Holding Companies

When platforms change this much this quickly, the conventional wisdom is that big advertisers absorb the shock more easily because they have the staff, the data, and the diversified mix to weather it. I think the conventional wisdom is half right.

Big advertisers absorb operational shocks better. That is true. But the structural change Google announced at I/O is a different kind of shock. It is a shift in how their customers actually use search. When a user can describe an entire problem in a paragraph, drop in a photo, and get an AI-generated answer with embedded booking flows, the path from intent to purchase is no longer a list of ten blue links and a few ads above them. It is a conversation, sometimes a long one, in which your ad either fits naturally into a multi-step exploration or it does not. That favors advertisers with clean creative, structured landing pages, and product data built to be machine-readable. And in my experience, plenty of national brands are further behind on that than the local HVAC contractor who has been disciplined about Google Business Profile updates for years.

What I Would Tell Any Advertiser to Do Now

I will say the same thing I have said about every major platform shift I have lived through. Do not move budget on hype. Move budget on evidence. With that as the frame, here is what I would actually be doing in the next ninety days if I were running paid search for any small or mid-sized business.

Audit your AI Max readiness. If your account is still leaning on Dynamic Search Ads, broad-match campaign-level setups, or aging asset libraries, you are going to be migrated whether you are ready or not. The advertisers who win in that migration will be the ones who treat it as a chance to clean up creative, tighten landing-page coverage, and feed the AI better signal. Not the ones who wait for September and hope.

Take AI Overview placements seriously, but verify the math. Ads showing inside AI Overviews are a genuinely new inventory pool, and early data suggests user behavior in those placements does not match traditional search results. Click-through rates, time-to-conversion, and assist patterns all look different. Treat early performance numbers as a starting point, not a verdict. Look for incrementality, not just last-click revenue.

Get your structured data and product feeds in order. The new Search box ingests text, images, files, video, and Chrome tabs. The Search agents are reasoning across the open web. None of that helps you if your website, your local listings, and your shopping feed are inconsistent or incomplete. The fastest, least glamorous lift you can make this quarter is making your business legible to a model. That work compounds across every AI-driven channel, not just Google.

Plan for measurement to keep getting harder. The trajectory across every platform, Google included, is toward more model-driven optimization and less granular advertiser control. That means first-party data, conversion tracking, and disciplined incrementality testing are no longer optional. If you have not stood up Enhanced Conversions or a Conversions API equivalent, that is the project that earns its keep this quarter.

Resist the urge to chase every new surface. Information agents, agentic booking, generative UI dashboards. All of it is exciting. Most of it will not be commercially relevant for the average small business for at least a year. Read the announcements, ignore the hot takes, and revisit each surface when there is real performance data to act on.

The Bigger Picture

The honest framing of what Google announced this week is that they are no longer betting on search engines as a category. They are betting on AI as the interface to all information, and they are rebuilding their advertising business to monetize that interface. Combine that with what OpenAI shipped a few weeks ago with its self-serve Ads Manager, and the picture for advertisers is unmistakable. We are not in the late innings of paid search as we have known it. We are in the early innings of something new.

For small businesses, the right response is neither panic nor passivity. It is preparation. Get your data clean. Make your creative AI-ready. Get your measurement honest. Pick the partners who are going to do the heavy operational work of keeping you fluent across three or four platforms instead of one. That is the lens we are applying at iPromote, and it is the lens I would encourage every advertiser to apply to their own decisions, no matter how loud the headlines get this week.

This is the start of a long conversation about what advertising looks like when search becomes a real assistant. The advertisers who engage that conversation thoughtfully are the ones who will still be growing when the dust settles.