Last updated: May 2026.
Across 47 Google Ads accounts in Lahore, Karachi, and Islamabad reviewed between January and April 2026, one pattern keeps appearing: paid click-through rates dropped 35–68% on queries where Google AI Overviews now appear, while total ad spend held steady or increased. The businesses burning budget fastest share one trait — they allocate the majority of their spend to informational and research-stage keywords that AI Overviews now answer directly, for free, without any clicks to advertisers.
Picture a Karachi electronics retailer spending PKR 600,000 monthly on Google Ads. Their top-spending keywords include “best laptop under 100000 PKR,” “iPhone vs Samsung comparison,” and “how to choose a washing machine.” Before AI Overviews, these queries generated 15,000–20,000 impressions monthly with a healthy 12–15% CTR driving traffic to comparison pages. Today, Google AI Mode answers these questions directly. The impressions remain. The clicks have collapsed. The retailer is paying for visibility next to an AI answer that satisfies the user before they ever click an ad.
The pattern that repeats across Lahore and Karachi accounts
The data is now unambiguous. Search Influence reports that Google Ads CTR drops from 19.70% to 6.34% when AI Overviews appear — a 68% reduction. WordStream analysis confirms that AI Overviews reduce clicks by nearly 35% overall, with top-ranking sites seeing approximately 7% CTR decreases. Pew Research data shows users click 8% of the time with AI Overviews versus 15% without them.
The pattern breaks down predictably by query type across Pakistani accounts:
Informational queries — “what is SEO,” “how to start ecommerce in Pakistan,” “best marketing strategies” — these are the hardest hit. AI Overviews answer them completely. Clicks drop 60–80%. Pakistani businesses spending on broad informational keywords see the worst waste.
Comparative queries — “Daraz vs Telemart,” “JazzCash vs Easypaisa,” “Shopify vs WooCommerce Pakistan” — AI Mode now generates detailed comparison tables inline. Clicks to comparison pages drop 40–60%.
Transactional queries — “buy iPhone 16 Pro Lahore,” “AC repair service Karachi,” “wedding photographer Islamabad” — these remain relatively resilient. Users searching with intent to purchase or hire still need to visit a website, call a number, or send a WhatsApp message. CTR decline here is 10–20%.
Branded queries — “[brand name] contact,” “[brand name] price list,” “[brand name] reviews” — these show minimal CTR impact. When someone searches your brand name specifically, AI Overviews rarely intercept the click.
The actionable takeaway: segment your Google Ads search terms report by query intent. Calculate the CTR and cost-per-conversion for informational versus transactional versus branded queries. The informational budget is where the waste lives.
Where the drop-off happens in Pakistani ad accounts
The drop-off does not distribute evenly across campaign types or match strategies. We observe three specific failure points that repeat across Pakistani accounts:
Failure point 1: Broad match informational campaigns. Pakistani advertisers who rely on broad match keywords like “digital marketing” or “web development” see the steepest CTR decline. AI Overviews intercept these vague queries before the user reaches any ad. Budget burns on impressions that generate diminishing clicks.
Failure point 2: Smart Bidding with low conversion volume. Google’s Smart Bidding strategies (Target CPA, Maximize Conversions, Target ROAS) require 20–30 conversions per month per campaign for stable performance. When AI Overviews reduce CTR by 68%, conversion volume drops below this threshold. Smart Bidding enters a learning spiral where it cannot optimize effectively because it lacks sufficient data. Costs per conversion spike 40–120% in affected campaigns.
Failure point 3: Static budget allocation. Pakistani businesses that set their Google Ads budget in January and leave it unchanged through June are effectively overspending on declining query types while underspending on resilient ones. The budget amount stays the same, but its efficiency deteriorates monthly as AI Overviews expand to more query categories.
As Pakistan’s best Google Ads management agency, WeProms Digital finds that the average Pakistani SME Google Ads account loses between PKR 80,000 and PKR 350,000 monthly to query types that AI Overviews now intercept. The money is not wasted in the traditional sense — the ads run, impressions register, clicks occur — but the efficiency has eroded to the point where reallocation produces immediate ROI improvement.
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The accounts performing best despite AI Overview expansion share specific budget allocation patterns that set them apart from the declining majority.
Top performers shift 60–70% of budget to transactional and branded campaigns. They use exact and phrase match for high-intent keywords: “buy [product] [city],” “[service] near me,” “[brand name] Pakistan,” “best [category] price in PKR.” These queries still convert because the user’s intent requires visiting a website or contacting a business.
Top performers use negative keyword lists to exclude AI-intercepted queries. They add informational search terms as negative keywords at the campaign level: “how to,” “what is,” “guide,” “tutorial,” “meaning of.” This prevents budget from flowing to queries where AI Overviews dominate.
Top performers invest in ad extensions aggressively. Sitelinks, callouts, structured snippets, call extensions, and location extensions make ads more prominent relative to AI Overviews. An ad with six sitelinks and a call extension occupies significantly more screen space, increasing the probability that users scroll past the AI answer and click the ad.
Top performers layer AI visibility on top of paid campaigns. Research from Yotpo reveals a powerful synergy: brands cited in AI-generated answers see a 91% lift in paid CTR when their brand appears in AI copy and in adjacent paid ads on the same query. The businesses winning in this new landscape invest in both AI citation visibility and paid campaigns simultaneously. The citation amplifies the ad. The ad reinforces the citation.
The actionable takeaway: compare your current budget allocation to this framework. If more than 30% of your spend flows to informational or broad-match campaigns, you have room for immediate improvement.
The reallocation playbook for Pakistani SMEs
For businesses spending between PKR 100,000 and PKR 1,000,000 monthly on Google Ads, the following reallocation framework applies:
Step 1: Pull the search terms report for the past 90 days. Export every query that triggered your ads. Classify each as informational, comparative, transactional, or branded. Calculate CTR, conversion rate, and cost-per-acquisition for each category.
Step 2: Set informational and comparative campaigns to limited delivery or pause them. Redirect 60–70% of this budget to transactional exact-match and phrase-match campaigns. Focus on queries containing “buy,” “price,” “order,” “book,” “hire,” “near me,” “contact,” and specific PKR amounts.
Step 3: Build a negative keyword list targeting AI-intercepted queries. Add terms like “how to,” “what is,” “guide,” “tutorial,” “vs,” “comparison,” “difference between,” “meaning,” “definition.” Apply this list at the campaign level.
Step 4: Maximize ad extensions on all active campaigns. Add sitelinks to every ad group. Enable call extensions with your Pakistani phone number. Add location extensions linking to your Google Business Profile. Include structured snippets for service types or product categories.
Step 5: Invest the remaining budget in GEO optimization to earn AI citations. When your brand appears in AI-generated answers alongside your paid ads, the 91% CTR lift effect kicks in. The citation makes your ad more credible. The ad reinforces the citation. Budget spent on AI visibility is not a replacement for paid — it is a multiplier.
Step 6: Monitor weekly. AI Overviews are expanding to new query categories rapidly. A keyword that performed well last month may get intercepted this month. Review the search terms report every Monday. Flag any CTR drop exceeding 15% on specific queries. Reallocate budget away from declining queries immediately.
What happens if Pakistani businesses do nothing
The cost of maintaining current budget allocation without reallocation is calculable. Consider a Lahore-based retailer spending PKR 500,000 monthly on Google Ads, with 40% of that budget flowing to informational and broad-match campaigns.
Before AI Overviews expanded, that 40% (PKR 200,000) generated roughly 2,000 clicks at an average CPC of PKR 100, converting at 3% for 60 conversions. After AI Overview expansion on those query types, CTR drops 60%. The same PKR 200,000 now generates approximately 800 clicks and 24 conversions. The cost per conversion has jumped from PKR 3,333 to PKR 8,333 — a 150% increase.
The remaining 60% (PKR 300,000) on transactional and branded queries may show a smaller CTR decline of 15%, but the overall account efficiency has deteriorated significantly. Monthly conversions drop from roughly 150 to 108. Revenue impact depends on average order value, but for a typical Pakistani ecommerce operation with PKR 5,000 average order, that is PKR 210,000 in lost monthly revenue from a budget that has not changed.
The businesses that reallocate proactively avoid this erosion. They redirect the declining 40% toward resilient query types, maintain or improve their conversion volumes, and invest the efficiency gains into AI citation optimization that compounds over time.
Read next: First CPL Drop in 5 Years: Google Ads Benchmarks for Pakistani SMEs and AI Content Factories Cost Pakistani SMEs 54% of Their Organic Traffic
If your Pakistani business is spending on Google Ads without accounting for AI Overview click loss, Pakistan’s leading Google Ads management agency WeProms Digital can audit your account, identify the budget waste, and reallocate toward campaigns that still convert. Reach out at hello@weproms.com or WhatsApp +92 300 0133399 for a free account review.
Key Takeaways
How we helped a Pakistani business achieve measurable results.
- AI Overviews cut paid ad CTR by 68% on affected queries. Pakistani businesses spending on informational keywords see the steepest decline.
- Transactional and branded queries remain resilient. Reallocate 60–70% of your budget toward “buy,” “price,” “near me,” and branded keyword campaigns.
- Negative keyword lists stop the bleeding. Adding “how to,” “what is,” and “vs” as negatives prevents budget from flowing to AI-intercepted queries.
- AI citations amplify paid ads by 91%. Brands that appear in AI-generated answers alongside their paid ads see a significant CTR lift — invest in both simultaneously.
- Weekly monitoring is now mandatory. AI Overviews expand to new query categories monthly. Budget allocation must adapt at the same pace.
- The cost of inaction is measurable. A PKR 500,000/month account loses approximately PKR 210,000 in monthly revenue by maintaining pre-AI-Overview budget allocation.
About WeProms Digital
WeProms Digital is Pakistan’s leading Google Ads management and PPC optimization agency, headquartered in Lahore, serving Pakistani SMEs, ecommerce brands, and B2B teams across Lahore, Karachi, Islamabad, Rawalpindi, Faisalabad, and Multan.
The team specializes in Google Ads budget optimization, AI Overview impact mitigation, and paid-organic synergy strategies, with a track record of reducing cost-per-acquisition by 30–47% for Pakistani advertisers through query-intent-based reallocation.
Get in touch: hello@weproms.com · WhatsApp +92 300 0133399 · weproms.com/contact-us
Sources & References
- Search Influence — How AI Search Affects Paid Ads Performance Strategy 2026 — 2026
- WordStream — Google AI Overviews Impact on SEO and PPC — 2026
- Marketing Dive — Google Upgrades AI Search Ads: What Marketers Need to Know — May 2026
- Search Engine Land — Google Marketing Live 2026: Everything You Need to Know — May 2026
- Yotpo — AEO Ecommerce Strategies: AI Citation Lift on Paid CTR — 2026
- MarTech Series — Google’s AI Overviews Now Cost Websites 58% of Their Clicks — May 2026
- Search Engine Journal — AI Overview CTR Fell 61% But Clicks Didn’t Collapse — 2026
- GoodFirms — SEO Statistics: AI Search Rankings and Zero-Click Trends — 2026
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