Google’s AI Ad Tools Just Raised the Floor. That’s Not Good News for Everyone.

Key Takeaways: 

• Easier ad tools can mean higher click costs. When anyone can launch a campaign in a few clicks, more advertisers join the auction, and more bidders can push up prices for everyone. 

• Automation needs oversight. AI Max can reach too far. In one dealership account, it matched used-vehicle searches to a Certified Pre-Owned (CPO) campaign. Regular search terms reviews catch this, because the system won’t flag it on its own 

• Judgment is the advantage now. Everyone has the same automation. Businesses win by managing it well: reviewing what the AI expands into, checking which searches spend the budget, and treating default settings as a starting point. 

Google is making it easier than ever to run a competent ad. 

AI Max in Search. AI-written ad copy. Video ads generated from a handful of images and a conversational prompt. 

The common take is that AI is coming for the ad agency. That may be true if you think of an agency as an ad copy factory. But if you think of an agency as a strategic partner, closer to an outsourced CMO, AI only makes it more valuable. 

Look closer, and what Google is actually doing is raising the floor. In other words, it’s getting hard to run a bad ad, but no easier to run a great one. Competent copy, competent creative, competent structure: all of it is becoming free. And anything free to everyone stops being an advantage to anyone. 

Why Google’s AI ad tools can raise your click costs 

Google is investing heavily in AI, and advertising is still the core of its business. These features are good for Google’s business, and they can be good for yours too, but only if someone is managing them. 

Making ads easier to launch brings more advertisers into the auction. When setup takes a few clicks, businesses that never had the time, staff, or capacity to advertise can suddenly go live. Some will benefit. But every new advertiser is another bidder, and more bidders can push up costs for everyone already competing. 

Anyone with 30 minutes and a credit card can now launch something that looks like a working campaign. Many of those campaigns will leave money on the table for the businesses running them, and some will raise the price you pay for the same clicks. 

The same goes for creative. When every business can generate a video from a few product photos and a prompt, a lot of those videos will look alike. Polished creative used to signal a serious advertiser you could trust. Now it may just mean someone clicked “generate.” 

So, the floor comes up, and the ceiling doesn’t move. More accounts land at “fine” instead of “actually working,” and most of them crowd in at the bottom. 

When AI Max goes too far: a real-world example  

What’s left is everything AI doesn’t hand you, plus the default settings that don’t always fit your account. 

Take Google’s AI Max, a set of AI-powered features for Google Search campaigns. It uses broad match and keywordless technology to match ads to searches beyond your keyword list, and it can automatically customize ad text and landing pages. We use it, and when it’s set up well, it does what it promises, but it doesn’t always know where to stop.  

One of our auto dealership clients runs separate search campaigns for Certified Pre-Owned (CPO) and used inventory. After we enabled AI Max on the CPO campaign, it started matching used-vehicle searches. It spent CPO budget on queries that belonged in the used campaign, served the wrong ads, and brought CPO-level bids into the used market. The automation decided the intent was close enough. 

We caught it in the search terms report, where queries like “used trucks near me” were showing up under the CPO campaign. The fix combined negative keywords, tighter AI Max controls, and a campaign structure built around how the dealership actually sells. Once those guardrails were in place, AI Max went back to doing what it does well. 

No automated system will flag its own overreach. That’s what regular search terms reviews are for. 

What wins in Google Ads when every ad looks competent 

When every ad looks decent, the advantage moves to judgment. Good campaigns now depend more than ever on knowing which segments are worth paying for and which to exclude, reading a market shift in week two instead of month three, and moving budget before your competitors notice. Judgment gets more valuable every time Google ships a new feature, not less. 

The obvious pushback is that AI will eventually learn the judgment part too. Some of it probably will. But Google’s automation is built to perform across millions of advertisers. It isn’t built around your margins, your inventory, or your goals. Those often line up with what the algorithm optimizes for, but not always, and someone needs to watch for the gap. 

How to manage Google’s AI ad tools well 

Easier entry means more competitors, and more competitors means standing out costs more than it did last year. 

For businesses that have never advertised, Google’s AI tools are a real opening. For businesses already in the auction, they’re a signal to get sharper. You won’t win by out-automating anyone because everyone has the same automation. You’ll win by managing it well: reviewing what the AI expands into, checking which searches are spending your budget, and treating every new default setting as a starting point rather than a final answer. 

Google raised the floor for everyone. The ceiling is right where it was, and reaching it still takes someone who knows what they’re doing.
 

Not sure what Google’s automation is doing in your account?
As a Google Premier Partner, Lodestar Marketing Group manages Google Ads and pay-per-click campaigns for businesses that want more than the default settings. We’ll look at what AI Max and Google’s other automated tools are spending your budget on, and where a little judgment could go further. Let’s talk.