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Google's AI Overviews cool search ad revenue, Amazon Ads decelerate on Prime Day changes, and UK Q4 ad spend hits a record £14bn forecast.
Google is disrupting its own ad business with AI Overviews, Amazon's Prime Day shake-up is rattling seller budgets, and UK Q4 ad spend is heading for an all-time record. Here's what ecommerce brands need to know now.
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The Digital Commerce Daily is a concise briefing for ecommerce, retail media and digital commerce professionals, hosted by Marco & Klara. New episode every day.
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Your 8-minute briefing on the platforms, players, and profits driving digital commerce today. Hosted by Marco and Klara.
Marco: Good morning — today's show is one you'll want to stick around for.
Klara: Google's AI search overhaul is starting to wobble, and ad budgets are feeling it.
Marco: Amazon's ad growth is cooling too — and Prime Day changes are at the centre of it.
Klara: Plus, UK ad spend is heading for a record-breaking fourth quarter.
Marco: Big stakes. Let's dig in.
Marco: Google's AI makeover of search is hitting some turbulence — and ad revenue is starting to feel it.
Klara: So give us the picture. Google has been the backbone of paid search for two decades. If you sell anything online, chances are you're spending money on Google Shopping ads — those product listings that appear at the top of results when someone searches for, say, a new coffee machine or a winter jacket.
Marco: And for years, that model worked brilliantly. You pay Google, your products show up, people click, people buy. The whole machine ran smoothly. But Google has been aggressively rolling out something called AI Overviews — basically, AI-generated summaries that appear at the very top of search results and answer your question before you even see any ads or links.
Klara: So what's actually happened now?
Marco: Google's search ad revenue growth has cooled. Investors did not like the earnings report. The concern is straightforward — if AI Overviews are answering questions before users click anything, fewer people are clicking ads. And if fewer people click ads, Google makes less money. The investors are worried that Google is essentially disrupting its own business model.
Klara: Which is an extraordinary position for the world's biggest advertising platform to be in.
Marco: It really is. And here's what I'd say to any ecommerce brand running Shopping campaigns heading into peak season — this is a structural warning, not a blip. If Google's own revenue is feeling pressure from this change, your click-through rates are probably feeling it too.
Klara: Though I'd add — Google isn't going anywhere, and Shopping campaigns still deliver real results for a lot of businesses. My concern is more about diversification. If one platform controls your traffic and that platform is mid-experiment, that's uncomfortable.
Marco: Fair enough. Don't panic, but do pay attention to your numbers. Coming up next — our second story of the morning.
Marco: Amazon's advertising business is still growing — but it's starting to lose some speed, and the reason why matters for sellers.
Klara: So let's set the scene. Amazon Ads has become one of the biggest advertising businesses on the planet. We're talking close to twenty billion dollars in a single quarter. For sellers on Amazon, buying ads is almost unavoidable now — if you want your products to be seen, you pay.
Marco: And one of the biggest moments in that ad calendar has always been Prime Day. Sellers would pile money into Amazon ads around that event, knowing that shoppers were in buying mode. It was predictable. Brands could plan months in advance.
Klara: So what's shifted?
Marco: Amazon has been tweaking Prime Day — changing its timing, its format, how the whole event is structured. And those changes have thrown sellers off. The result is that ad revenue growth has slowed. Not collapsed, but noticeably decelerated. When you're a platform approaching twenty billion per quarter and your growth rate drops, that's a significant number in absolute terms.
Klara: And I think the Wall Street story is almost a distraction here. The more important question is what happens to the sellers who built their entire year around Prime Day. You plan your stock, your promotions, your ad budget — all calibrated to that one predictable spike.
Marco: Exactly. And if Amazon keeps experimenting with when and how Prime Day works, that certainty disappears. Anyone building their 2026 or 2027 ad strategy needs to treat Prime Day as a variable now, not a fixed date.
Klara: Though I'd say — maybe that's not the worst outcome. Over-relying on one event to drive your whole year was always a fragile plan.
Marco: Fair. Diversify your peaks, not just your platforms. Our third story is up next.
Marco: The UK ad market is heading for its biggest Q4 on record — and if you haven't locked in your media budget yet, that's a problem.
Klara: So let's put this in plain terms. Every autumn, brands pour money into advertising ahead of the Christmas shopping season — Black Friday, Cyber Monday, the whole peak trading window. The more brands compete for the same ad space, the more expensive that space gets.
Marco: And the forecasts are now telling us this year will be the most expensive on record. UK ad spending across the full year is projected to hit £51.3 billion in 2026. But the number that really matters for ecommerce brands is Q4 — fourteen billion pounds in a single quarter. That's never happened before.
Klara: To put that in perspective, fourteen billion pounds of ad spend crammed into roughly twelve weeks. That's brands across retail, fashion, electronics, grocery — all bidding against each other for the same eyeballs at the same moment. CPM — that's the cost you pay to reach a thousand people — is going to be under serious upward pressure.
Marco: And this is a macro tailwind and a headache at the same time. The overall market is healthy, digital channels are strong, social and retail media are both growing. That's good news. But it also means that if your budget isn't already planned and committed, you're walking into an auction where the bids are already climbing.
Klara: I'd push back slightly on the urgency framing though. For smaller brands, peak season ad budgets are rarely set months in advance — they flex based on what's actually happening with stock and sales. The real lesson here is efficiency, not just spend. Know your numbers so you're not overpaying for placements that don't convert.
Marco: That's the right call. More competition in the auction means the brands with sharp targeting and tight creative will punch above their weight.
Marco: The single biggest idea from today — the two platforms that carry most ecommerce traffic are both showing cracks at exactly the moment ad budgets are hitting record highs.
Klara: So look at your channel mix this week. If Google and Amazon are your whole plan, that's worth questioning.