Direct Offers: Google’s First Agentic Ad Format

Google’s new Direct Offers signals a new era of search advertising. The format is the clearest sign yet that search ads are evolving into agentic experiences where AI negotiates value exchange in real time between shoppers and brands. Google announced the Direct Offers pilot this week as part of its wider agentic commerce push, positioning it as a bridge between product research and the final decision to buy.

This is how it works. When a user moves from broad exploration into specific SKU selection, AI Mode can now surface an exclusive “Sponsored deal” for the exact product they are considering, such as 20% off a particular rug with a “Get code” button embedded directly in the conversational flow. On the retailer side, brands set up the offers they are willing to make inside their campaign settings, and Google’s AI determines when a given promotion is relevant enough to show one-to-one, based on context and intent signals rather than just keywords. The initial focus is on classic discounts, but the roadmap already points toward richer value propositions such as bundles, free shipping and other offer structures that can be tuned to margin, inventory and customer value rather than applied as blunt, sitewide promotions. Launch partners including Petco, e.l.f. Cosmetics, Samsonite, Rugs USA and Shopify merchants are effectively co-designing how these agentic offers behave in live shopping journeys, even as many retailers remain cautious about over-relying on discounts unless they are core to their model.

In many ways, Direct Offers echoes the earliest days of Google search ads, when AdWords launched in 2000 as simple, self-serve text units triggered by keywords and later evolved into a sophisticated auction system emphasizing relevance and performance. That first wave transformed intent into a scalable media channel; this new wave aims to transform intent into personalised value, delivered by AI at the exact moment of choice.

Direct Offers is likely just the opening move in a broader explosion of agentic ad experiments, where branded agents, AI shopping protocols and real-time incentives converge to turn the search box into a full-funnel, value-aware buying assistant for both shoppers and brands.