Last week's Google Marketing Live and Google I/O were probably the most consequential week for e-commerce advertising since Performance Max launched. And almost none of the noise that's followed has been useful if you actually run a shop.

So here's the version I'd give to a client over coffee. What changed, what to ignore, and what to do about it before the people copying my emails ahead of their Monday review start asking.

Universal Cart and Native Checkout: the bit nobody quite believes yet

Google announced a Universal Cart that works across merchants — pick something on YouTube, drop it next to something from Search, check out with one click via Google Pay without leaving Google's surfaces. Pair that with the Universal Commerce Protocol — an open standard for AI agents talking to merchants on behalf of shoppers — and the picture is suddenly very clear. Google is building the Amazon checkout it never had, and the agent inside Gemini is the storefront.

Here's the bit I'd underline: the agent doesn't care about your homepage. It cares about your product data. Title, description, attributes, structured data, availability, price. If your feed is sloppy, the agent will quietly pick the competitor whose feed isn't.

Conversational Discovery and Highlighted Answers: the new ad slots inside AI Mode

Google introduced two new ad formats inside AI Mode this week. Conversational Discovery ads sit inside the back-and-forth chat. Highlighted Answers slot in when the AI surfaces a direct response. Both are exclusive to AI Max and Performance Max.

If you've been waiting for someone to tell you what AI Mode means for paid traffic — this is it. The format is no longer "ten blue links and four shopping cards above them". It's a conversation, and there are paid slots inside the conversation. Plain Search ads still exist. They just look more like the underground while the new traffic takes the express line.

The first AI Mode usage numbers — and what they actually say

Google quietly released the first usage data after a year of AI Mode being live. The headline number — billions of queries, double-digit growth, the usual — is less interesting than what's underneath it. The people using AI Mode are asking longer, messier, more specific questions. Things like "I need a gift for a 60-year-old man who already has everything and doesn't drink." That's not a keyword. That's a brief.

AI Max for Search came out of beta this week to handle exactly those queries, with Google claiming 27% more conversions. The catch is that without explicit brand voice and guardrails — the new AI Brief feature, which lets you write your rules in plain English instead of a negative keyword list — Gemini will happily write copy for you that sounds like it was generated by Gemini. For luxury or premium brands, that's a disaster waiting to happen.

llms.txt: two arms of Google saying different things

This was the week the technical-SEO crowd discovered Google's two main product teams don't agree on agentic SEO. Google Search said llms.txt isn't needed for AI features. Google Lighthouse, the very same week, added an experimental audit that checks whether you have one.

What I'd take from that: nobody at Google has finished the meeting yet. The serious question is whether AI agents — not LLM training runs, agents doing real-time shopping — can read your site's structured data, find what they need, and act on it. If yes, you're fine. If no, you should care, regardless of which Google team has the cleaner microphone.

Budget misallocation is the boring one, but it's where the money goes

Buried under all the AI fireworks, Search Engine Journal ran a piece on Google Ads budget misallocation being "more common than you think and harder to spot". I'd go further. With Performance Max in the mix, most accounts I look at have Smart Bidding starved of conversion data somewhere, branded traffic getting double-billed across PMax and Search, or budget pinned to a channel that's running well below cost-of-sale targets.

In an account I reviewed this week, simply reallocating spend within an existing PMax budget — no extra investment — moved revenue up 18% in the first weekend. The point is not the number. The point is the same one I keep making: AI tools don't fix bad structure. They amplify it. Universal Cart and Conversational Discovery ads are going to amplify whoever already had a clean feed, a clear brand voice, and budget pointed at the right things.

What I'd actually do this week

If you run an e-commerce business on Google Ads, three things are worth a serious hour:

One — open your Merchant Centre feed and ask yourself whether an AI agent buying on a customer's behalf could pick your product over a competitor's based on what's in it. Titles, descriptions, attributes, structured data. If you'd struggle to choose, an agent will too.

Two — if you're running AI Max or Performance Max, get an AI Brief written. Brand voice, audience, the things you don't want said about your product. Plain English is fine. Don't let Gemini guess.

Three — get someone honest to look at where your Google Ads budget actually goes. Not the campaign-level dashboard. The flow from Search into PMax into branded vs non-branded vs Shopping vs Demand Gen. That's where the leaks are this year, and they're the ones the AI tools genuinely will widen if you ignore them.

The week we just had wasn't really about new ad formats. It was Google telling everyone that the customer's first encounter with your shop is no longer your homepage — it's an agent answering a conversational query, picking from a Universal Cart, paying with Google Pay. The shops that thrive in the next twelve months are the ones whose data, voice, and budget structure make them the obvious pick for that agent.

If you're not sure whether yours does, I'm always happy to take a look.