Google Tests Direct Offer Promo Codes in AI Mode

Google is testing a Direct Offer asset in Google Ads that lets its AI show shoppers a promo code inside AI Mode, according to Search Engine Land.

For Ecommerce Paradise readers who run Google Ads to a Shopify store, this is Google building a way to hand your shopper a discount at the moment they decide. You set the discount. Google picks the timing. On a hypothetical $2,400 item at a 22% gross margin, a single 10% code gives away about 45% of the profit on that order.

The timing matters because Google is also switching on automated promotions for eligible accounts on Oct. 12, which I covered on Oct. 3 in my post on Google Ads automated promotions. Below: what the Direct Offer beta does, how it got here from an invite-only pilot, the margin and MAP math, and the setup I’d use before Google opens it to your account.

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Google Direct Offer Asset: What the AI Mode Beta Does

Search Engine Land’s Anu Adegbola reported on Oct. 7 that Google Ads is testing a beta-labeled Direct Offer asset. It sits in the Assets interface next to Promotions, Messages and Lead forms, and advertisers can create it at the account or campaign level, per the Search Engine Land report.

Here is what the shopper sees, according to that report. A promotion can appear beneath a sponsored result in AI Mode as a “Claim one-time code” option. Selecting it opens the offer details and the promo code, plus a button that sends the shopper to the advertiser’s website.

Here is what the advertiser enters, per the same report:

An internal offer name, a final URL and a short description. Google’s AI uses that description to decide when the offer is relevant, and it can generate the offer text shoppers see. You then set the incentive type and value, and you can upload single-use promo codes by CSV. You can add several incentives, and Google’s AI chooses which one to show based on shopper behavior and context. You also add terms and conditions, a terms URL, and start and end dates.

The control that matters most is the cap. Advertisers can set daily limits by total value or by number of claims.

There is one hard requirement. According to Search Engine Land, Direct Offers will only serve on campaigns using AI Max or text customization. The report does not spell out which campaign types qualify beyond that, and it gives no rollout dates, regions or pricing.

It also contains no performance data. Nobody outside Google has published a conversion rate, a redemption rate or a cost per claim for this format. Treat every claim about results, including mine, as unproven until a test says otherwise.

Direct Offers: From January Pilot to an October Ads Asset

This did not appear from nowhere. Vidhya Srinivasan, Google’s VP and GM of Ads and Commerce, announced Direct Offers as a pilot on Jan. 11, 2026, in a post on the Google blog. The pilot “allows advertisers to present exclusive offers for shoppers who are ready to buy,” the post says.

Google labeled those offers “Sponsored deal” and used a 20% discount as its example. It said the pilot starts with discounts and plans to add other offer types such as bundles and free shipping. The brands named were Petco, e.l.f. Cosmetics, Samsonite, Rugs USA and Shopify merchants.

By Feb. 9 the pilot was still in alpha. Accelerated Digital Media reported that even Google Premier Partner agencies did not have access yet. Ginny Marvin, a Google Ads product liaison, said the system “relies strictly on your verified Merchant Center feed and the specific promo codes you upload,” according to Accelerated Digital Media. The same write-up says placements are not triggered by keywords or a conventional auction, and that advertisers cannot pay to have the AI recommend their products over others.

Nine months after the pilot the format has a spot in the Google Ads interface. That is the step from “select retailers” to “an asset type any advertiser can eventually create.” Whether it reaches your account soon is unknown, since the Oct. 7 report gives no timeline.

Direct Offers also sits beside two other recent Google changes. On Oct. 7 Google opened Conversion Lift testing to Search and Performance Max, which I wrote up in my Conversion Lift post. That tool is how you would measure whether a Direct Offer brings in sales you would not have won anyway.

The AI Max requirement is the part to read slowly. Google’s help page for AI Max for Shopping campaigns, which is in beta, says advertisers who turn it on “will typically see +5% more conversions / conversion value at a similar CPA/ROAS,” a figure based on Google internal data for retail advertisers in 2026, per Google’s support page. The same page says text customization rewrites product titles from your Merchant Center feed, limited to English feeds, and that a customized title serves only if Google predicts it will beat the original.

Independent testing paints a harsher picture. PPC Land reported on May 3 that a November 2025 study of more than 250 retail campaigns found AI Max delivered roughly 35% lower ROAS than traditional match types. It also cited an August 2025 analysis in which about 99% of impressions across roughly 30,000 search terms produced zero conversions, according to PPC Land. Those studies covered AI Max for Search. Google’s own April 2026 average, as PPC Land cites it, is 7% more conversions with the full feature suite. The two sides disagree, and I have not seen a side-by-side test on a high-ticket catalog.

The sharpest outside criticism of Direct Offers is a January piece from the agency Meetrise, which called the format “a trap disguised as an opportunity” because once one retailer in a category joins, the others must follow with their own discounts, per Meetrise’s analysis. The author also wrote that retailers should not necessarily avoid it, and that testing and measuring is worthwhile. Google’s side of the argument is Marvin’s: the offers come only from your feed and the codes you upload.

Direct Offer Promo Codes vs Your Margin and MAP Policy

Everything from here down is my analysis, not reporting.

My read is that Direct Offer is a discount budget you hand to Google, with Google choosing the moment. Your only brakes are the claim cap, the dates and the incentive you load. The cap limits how many codes go out. It does not limit who claims them.

Here is the math, and it is hypothetical. Take a $2,400 sofa at a 22% gross margin. That is $528 of gross profit before ads. A 5% code costs $120. A 10% code costs $240.

Whether the code pays depends on one number, the share of claimants who would not have bought without it. Call that p. At 5%, your net per claim is $528 times p, minus $120, so the code breaks even when p reaches about 23%. At 10%, it is $528 times p, minus $240, so you need p near 45%. Ad cost comes on top of both.

A high-ticket buyer is often already comparing three dealers with a quote in hand. How many claimants are truly incremental? I don’t know, and neither does anyone else yet. That is why I’d treat the first month as a measurement exercise.

The cap is where I’d be strict. A $720 daily value cap on 10% codes means up to $21,600 a month in discounts if it fills every day. That is cheap if claimants are new customers and expensive if they are people who were about to pay full price.

The second risk is MAP. If your supplier agreement sets a minimum advertised price, a code shown inside an ad can read as an advertised price below MAP. Policies differ by brand, and I’m not a lawyer, so get each supplier’s answer in writing before you load a code for their products. If you source from feeds on Inventory Source, check the brand’s own policy first, because the feed does not tell you.

The third risk is the AI Max catch. To use Direct Offers you apparently have to run campaigns with AI Max or text customization, and that lets Google rewrite titles and headlines. For a catalog where model numbers and spec accuracy close the sale, that is a real tradeoff. Google says customized titles must be grounded in your feed. The independent data above says to test before you trust.

Scenarios with thresholds, still hypothetical. At a 22% gross margin your break-even ROAS is about 4.5 before any discount. If an AI Max test campaign sits below that for four weeks, switch it off and keep your control campaign. If it runs above it and the incremental share of claims looks near or above the break-even levels above, widen to one more product group. If claim volume jumps but ROAS falls, the codes are going to people who would have paid full price.

Google chooses which incentive to show based on shopper behavior and context, per Search Engine Land. That is close enough to the personalized-pricing questions regulators are asking that I’d read my breakdown of FTC and state scrutiny of personalized pricing before switching this on. I’d also expect customers to talk. A buyer who saw a code in AI Mode will ask your support team why the quote is different, so give Gorgias or your help desk a macro for it.

Existing discount habits matter too. If your Klaviyo abandonment flow already sends a code, a second code in AI Mode teaches shoppers to wait for two. I’d decide which one owns the discount, then audit your Klaviyo flows against that decision.

On the Shopify side, I’d treat codes the way I treated promotion tests in my post on Shopify Rollouts testing discounts on live traffic: one offer at a time, a share of traffic, a clear comparison. Track the result in Finaloop or whatever bookkeeping tool shows profit per order after discounts, because revenue alone will flatter this format.

Running Google tests, Shopify discount rules and supplier MAP checks at once is a second job. It is the kind of work my team takes on inside the turnkey done-for-you build, so you decide what a promotion is worth and we handle the setup.

Want to compare notes on promo-code tests with other high-ticket store owners before you spend a dollar on them? Join the Skool community →

Direct Offer Setup Steps for a High-Ticket Google Ads Account

Here are five things I’d do before Google opens this to your account:

Set a discount ceiling per product. Pull gross margin by SKU and write down the largest code you would ever fund. I’d cap it near a third of gross profit, so a 22% margin item tops out around 7%. Confirm your real landed cost first from your supplier price sheets or a wholesale source such as Wholesale2b.
Get MAP answers in writing. Email each brand’s rep and ask whether a promo code shown in a Google ad counts as an advertised price. Exempt any brand that says yes or will not answer.
Prepare the codes in Shopify. Create Shopify discount codes that are single-use, limited to one per customer, set not to combine with other discounts, and set to expire on the same date as the Google offer.
Run one narrow test with a control. One campaign, one low-MAP-risk product group, a margin-based claim cap, four weeks, and Conversion Lift or a matched control campaign beside it. Use Semrush to see which competitors in your category already run price-led ad copy so you know what you are testing against.
Decide on Oct. 12 now. Google’s automated promotions switch on by default for eligible accounts, and you can turn them off under “Automated Promotions” in the account-level automated asset settings, per Search Engine Land’s Oct. 2 report. Decide whether you want a banner on your site becoming an ad asset, and set it before the date.

If you want a second set of eyes on your Google Ads account before you run the test, book a discovery call and bring your margin numbers.

Frequently Asked Questions

What is Google’s Direct Offer asset?
It is a beta Google Ads asset that lets an advertiser load an incentive and promo codes, which Google’s AI can then show inside AI Mode as a “Claim one-time code” option, per Search Engine Land.

Can I use it today?
Probably not by default. Search Engine Land describes a test with no rollout timeline, and the January pilot ran with select retailers. Check the Assets tab in your account and ask your Google rep.

Do I have to turn on AI Max?
According to Search Engine Land, Direct Offers only serve on campaigns using AI Max or text customization. Tighten the account first, starting with my guide to feed-only PMax exclusions.

Could a Direct Offer break a supplier’s MAP policy?
It might, depending on the brand’s wording. I’m not a lawyer, so ask each supplier in writing and keep the answer with your dealer agreement.

How do I keep past customers from claiming a code?
The Oct. 7 report mentions no audience exclusion for this asset. Single-use, one-per-customer Shopify codes help, and Meta’s new past-buyer exclusion shows where the industry is heading, which I covered in my Meta past-buyer exclusion post.

Is this worth testing on $3,000 products?
There is no data yet, so test small. If you are still choosing what to sell, start with my high-ticket dropshipping guide. Then grab the free 1,000+ niches list.

How does this fit with Google’s checkout work in Merchant Center?
Separately, for now. Google opened its UCP checkout hub in Merchant Center this week, which I broke down in my UCP hub post, and both depend on clean feed data.

Want my team to build and run your high-ticket store while you decide what a promotion is really worth? See the turnkey done-for-you service →

I’ll keep watching how Google rolls this out and whether anyone publishes real redemption numbers. Subscribe to the YouTube channel for daily breakdowns. More breaking news coming through the day.

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Trevor Fenner

Trevor Fenner is an ecommerce entrepreneur and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.