Google Expands AI Shopping Ads and Agentic Commerce Plans for 2026

Google is making the push deeper into AI-powered shopping.

Vidhya Srinivasan is Google’s VP of Ads and Commerce. She explains the path the company plans to connect linking advertising, shopping, and artificial intelligence. This happens across Search, YouTube, and Gemini in 2026.

AI-driven commerce is gradually moving from experiment to execution.

UCP Now Powers Real Purchases

Google has confirmed that its Universal Commerce Protocol (UCP) is now powering purchases from Etsy and Wayfair for U.S. shoppers inside AI Mode on Search and Gemini.

The UCP was first introduced at NRF 2026. It was co-developed with Shopify. At launch, more than 20 companies backed it. Google, now says hundreds of tech companies, retailers, and payment partners have shown interest.

The company believes UCP can go beyond retail. It sees the protocol as the foundation for “agentic commerce,”. It is here that AI systems help users discover, compare, and buy products across categories.

In short, AI is not just answering questions but helping complete transactions.

New Ad Formats in AI Mode

Google is also testing new ad formats inside AI Mode.

One format highlight how a retailer offering products are related to a user’s search. These listings are clearly marked as sponsored. The goal is to help shoppers find easy buying options while giving brands visibility during the decision-making stage.

Google is also expanding its Direct Offers program. First introduced at NRF, Direct Offers allows brands to share tailored deals with shoppers in AI Mode.

Before focusing on price discounts, the program will now include loyalty rewards and bundled offers. This gives retailers more flexibility beyond simple markdowns.

Creator and Brand Matching on YouTube

YouTube remains central to Google’s commerce strategy.

Srinivasan called creators “today’s most trusted tastemakers,” citing a Google and Kantar study of weekly video viewers.

Google is building new AI tools that match brands with creators based on audience data and content alignment. The company previously introduced an “open call” feature to help brands find creator partners. More advanced matching tools are planned for 2026.

AI-Generated Creative on the Rise

Google also shared new data on AI-generated ad assets.

In 2025, Gemini-generated assets increased threefold. In Q4 alone, nearly 70 million AI-generated assets were used across AI Max and Performance Max campaigns.

Google’s video generation tool, Veo 3, is now integrated into Google Ads Asset Studio, with other AI tools.

The company also claims AI Max is creating billions of new searches that advertisers previously could not reach.

What This Means for Advertisers

Many of these updates were announced earlier at NRF or during Google’s Q4 earnings call. However, the annual letter now helps clear the air.

Google sees 2026 as the year agentic commerce becomes operational reality. UCP is positioned as the backbone linking AI agents, payments, and shopping experiences.

For advertisers, the key updates are expanded Direct Offers and new AI Mode ad formats. For ecommerce businesses, the confirmation that Etsy and Wayfair are processing real transactions through UCP signals that AI checkout is live.

Still, questions remain around merchant controls and reporting.

More details are expected at Google Marketing Live this spring.