How Agencies Can Thrive in Google’s AI-Powered Ads Era

Google Ads is not what it used to be – and that’s both exciting and a little scary, especially if you run a digital marketing agency. In 2025, AI runs through everything in Google Ads. Smart campaigns optimize bids in milliseconds, Performance Max decides where your ads show across YouTube, Search, Display, etc., and even ad copy suggestions are served up by machine learning. It’s as if you went from driving a stick-shift to sitting in a self-driving car almost overnight. The result? Big opportunities, and big questions for agencies. On one hand, this automation can be a PPC marketer’s dream: efficiency at scale and “smart” optimizations that happen 24/7. On the other hand, handing the keys to Google’s algorithms without supervision can feel like risky business – will the AI truly drive towards your client’s best interests, or just chase easy wins that make the metrics look good? As one Search Engine Journal contributor put it, “hand over the keys without guardrails and you risk wasted spend or campaigns chasing the wrong metrics.” In this post, we’ll explore the growing tension (and synergy) between AI and human control in Google Ads, and what agencies can do right now to strike the perfect balance for their clients.

The Rise of Automation: More Power, Less Transparency

There’s no question – Google’s automation can supercharge campaign performance. We’ve seen it in action: auto-bidding algorithms reacting to conversion likelihood, new AI-based campaign types like Performance Max unearthing audiences you might never have targeted manually, and machine learning that can test dozens of ad variations to find what resonates. It’s no wonder that the vast majority of PPC marketers are embracing these tools. In fact, over 75% of PPC pros report using AI to optimize campaigns. Google itself has nudged everyone this way, touting that advertisers who use automated products see better results (for example, many are shifting more budget into Performance Max – one survey found 63% of experts planned to increase PMax spend in 2024).

But along with those thrills of automation, there are chills that agencies know too well. A big one is the loss of visibility and fine control. Nearly half of PPC specialists say managing campaigns has become more difficult in the past couple of years, largely because automation like PMax acts as a black box. You might see conversions going up, but the AI doesn’t readily show which keywords or placements are driving them. Important questions like “Are those leads any good?” or “Is my budget being spent on my target demographic or wasted on tire-kickers?” become harder to answer when Google shields so much data. This can lead to some nasty surprises. There are war stories out there – for instance, one agency recounts how an AI-driven campaign spent 70% of its budget on low-quality display network placements, racking up lots of clicks (and cost) but very high bounce rates. Because the platform kept those details hidden under aggregated reports, it wasn’t obvious until real sales started drying up. Yikes.

What’s happening here? In short, automation follows the path of least resistance. If you tell Google Ads to get as many conversions as possible for $50 each, it’ll do exactly that – even if 80% of those conversions are actually poor-quality (think: repeat freebie seekers or irrelevant audiences). The algorithm doesn’t (yet) understand your business strategy or lifetime value; it optimizes to the metric you give it, come hell or high water. So while you might see an initial jump in volume (cheap conversions!), performance can tank once those easy wins are exhausted or when you realize those conversions weren’t worth much. PPC experts even have a term for this: the “two-week honeymoon” of AI campaigns. The first couple weeks, things look great – the AI is likely gobbling up remarketing and brand searches that convert easily. Then it gets “confident” and expands to colder audiences, and suddenly CPL or ROAS goes south. We’ve seen that pattern constantly in accounts that go full-auto.

Why Humans Aren’t Going Anywhere (Hint: Strategy Still Matters)

Given the scenarios above, it’s clear that while AI is amazing at execution, it’s not a set-and-forget solution. Human oversight is the not-so-secret ingredient behind the best performing Google Ads campaigns. Here’s some reassurance: the data backs this up. In a recent analysis, traditional campaigns structured and managed by humans (yes, with good old manual finesse) outperformed Google’s automated campaign setups by 22% higher conversion rates on average. Similarly, ads written by human copywriters earned significantly higher click-through rates than those auto-generated by AI – one study saw a 4.98% CTR for human-written ads vs 3.65% for AI-written ads, meaning the human touch yielded about 27% more engagement. That’s a big difference in an arena where small percentage gains make or break ROI. The reason is intuitive: humans understand other humans. We know how to craft a message that appeals to emotion or solve a specific pain point. AI, for all its intelligence, tends to serve up pretty generic, one-size-most headlines that don’t differentiate a brand.

Another reason humans remain vital is context and adaptability. Business landscapes can change on a dime – a new competitor enters, a product gets out of stock, a sudden viral trend pops up affecting consumer behavior. Algorithms learn from historical data; they’re like large cargo ships that take time to change course. If a sudden context shift happens (say, a Black Friday sale or a pandemic lockdown), a human marketer can react immediately with new strategy or creative, whereas the AI might flounder for weeks because those conditions deviate from its training data. We’ve observed cases where smart bidding algorithms kept spending aggressively after a promotion ended, oblivious to the fact that conversion rates had fallen back to normal – effectively over-bidding for what became subpar traffic. It took manual intervention to dial things back until the machine relearned.

Crucially, humans excel at big-picture thinking and cross-channel strategy, which AI in Google Ads does not handle. Your client’s marketing isn’t only within Google. Knowing how to allocate budgets between Google, Bing, Facebook, or even non-digital channels based on where you see diminishing returns is a human decision (for now). In fact, some savvy agencies have started to pull back on Google in certain cases – for example, if Google’s algorithm keeps targeting junk leads for a B2B client, an agency might advise shifting more budget to LinkedIn where you can target by job title directly. That kind of call – “let’s move dollars to where the targeting suits our needs better” – is strategic and requires a holistic view that no single-platform AI will suggest.

To sum it up: AI is incredibly powerful, but it’s not infallible or omniscient. As an agency, your role as the experienced driver and navigator is more important than ever. Clients don’t just need someone to push the buttons in Google Ads (Google is kind of doing that itself now); they need someone to interpret the results, make creative and strategic adjustments, and ensure all this automation actually aligns with their goals (not just Google’s). Or as one industry CEO put it: “The most successful digital marketers will be those who merge machine capabilities with human oversight. One without the other will fall short.”

What Agencies Can Do Now: Making AI Your Ally, Not Your Replacement

So, how can you as a marketing agency harness Google’s AI for good – keeping control and delivering great results? Here are some actionable steps and service ideas to consider, including ways to enhance your white label services (many of which we cover in depth in our Tech Briefing, by the way):

• Educate & Set Expectations with Clients: First, start having proactive conversations about what Google’s automation can and cannot do. This is as much a client relations step as a tactical one. Explain that tools like Performance Max leverage tons of data to find opportunities, but they still need to be pointed in the right direction. For example, if a client hears “Google’s AI will get us more conversions,” clarify that someone needs to define what kinds of conversions matter. It’s on the agency to input the right targets (sales, qualified leads, etc.) and boundaries. By educating clients, you also reinforce why your guidance is crucial – the AI isn’t a magic box where you drop in a quarter and outcomes pop out; it’s more like a high-performance engine that still requires a skilled driver.
• Offer an “Automation Audit” (and Reclaim Wasted Spend): One immediate high-value service you can provide is a Google Ads Automation Audit. Think of this as a specialized account audit focusing on where the algorithm might be misaligned. In many cases, we’ve found that auditing a fully automated account uncovers 20% or more of spend going to waste that can be corrected. You might discover, for instance, that a broad-match campaign is spending heavily on unrelated search terms, or that the account is counting a flurry of spam form fills as conversions (yes, we’ve seen AI happily optimize for “conversion spam” until a human steps in). By identifying these, you can take actions to plug the leaks – add negative keywords, tighten conversion definitions, exclude poor audiences, etc. Presenting this as a formal audit service not only adds value to clients, it’s a great foot-in-the-door offering for new prospects who have “tried Google Ads” with poor results. It showcases your expertise in taming the AI and immediately justifies your fees by saving money.
• Set Up Guardrails in Every Account: When it comes to execution, make it standard practice to configure human safety nets around Google’s AI. This includes simple things like turning off Google’s auto-applied recommendations by default (they often make broad changes that benefit Google’s inventory more than your performance). Instead, use those recommendations as a to-do list to manually review. It also includes setting max CPC limits or bid caps in portfolios where appropriate, using location and audience exclusions to prevent obvious misfires (e.g., excluding “job seekers” or “freebie” audiences if you notice the AI dipping into those pools). Another pro tip: implement scripts or automated rules for alerts – for example, an anomaly detection script that emails your team if spend in a day exceeds, say, 120% of the 7-day average. It’s about not leaving the AI unattended for too long. Just like you wouldn’t leave a toddler alone in a room full of candy (they will find trouble), you periodically check in on your campaigns and have alarms if something really looks off. Clients rarely object to these precautions; in fact, it gives them confidence that someone’s watching the store.
• Enhance Your Creative & Targeting Inputs: One area where agencies can shine is feeding better creative and data inputs into the machine. Google’s automation, especially things like responsive search ads and Performance Max, will take whatever text, images, and audience signals you give and run wild with them. So make those inputs count. Invest time in writing compelling ad assets (use your copywriters’ talents to give the AI good material to work with – it will automatically mix and match headlines, but it’s up to you to supply benefit-driven, specific messaging rather than generic lines). On the data side, work with clients to integrate first-party data. For example, set up Customer Match lists (if policies allow) so you can tell Google who your client’s past converters or high-value customers are – the AI can then model lookalikes more effectively. If your client has a CRM, connect offline conversion tracking, so that a lead isn’t counted as success unless it actually qualifies or closes. These steps ensure the AI isn’t optimizing for vanity metrics. They also differentiate your agency’s approach. Anyone can let Google run broad targeting with generic ads; your value is in crafting the message and target definition that align with the client’s brand and goals, then letting AI scale that. We often say: garbage in, garbage out with AI. By supplying quality ingredients, you get far better results, which clients will absolutely notice in the form of higher-quality leads and better ROI.
• Develop Human-AI Hybrid Workflows: To stay competitive (and profitable), agencies should also use AI to their own advantage in internal processes. This doesn’t diminish the human role – it amplifies it by freeing up time. For example, you might use ChatGPT or similar to draft initial ad copy ideas or analyze search query reports faster, then have your team refine the outputs. One PPC manager described their new role as “I’m no longer writing copy from scratch; I’m an editor – I feed AI some info and then polish the result.” That can speed up deliverables while keeping quality high. Another workflow might be using scripts to automatically pause ads or keywords that overspend without converting (something you’d do manually before – now you can set criteria and let a script handle routine culling, then you review it later). The key is efficiency. If AI can cut out repetitive grunt work (like monitoring bids 24/7 or pulling performance reports), your team can spend more time on strategy and creative tactics that truly move the needle. This not only helps results but also makes your agency more scalable. You can manage more client accounts or campaigns per team member, which is great for growth. Importantly, be transparent (to a point) with clients about this; it reinforces that you’re using all the tools at your disposal to give them an edge. For instance, letting a client know “We employ advanced AI monitoring to watch your campaigns even off the clock, with alerts if anything looks off” can boost their confidence in your service.
• Position Yourself as the Strategic Partner (Not Just a Button-Pusher): Perhaps the most important thing an agency can do is reframe your value in client communications. Make it clear that your expertise isn’t in clicking buttons in the Google Ads UI – it’s in guiding the overall PPC strategy to success. In proposals and reports, emphasize the strategic decisions, optimizations, and insights your team provided. For example, you might include a narrative like: “This month, we noticed the automated campaign was preferring Product X which has lower margin. We reallocated budget to Product Y and adjusted ROAS targets. As a result, overall ROAS improved from 3.5 to 4.5.” This highlights that your team made that happen, even though the AI executed the individual bid changes. By consistently doing this, you mitigate the risk that a client thinks “well, aren’t we just letting Google run things… what do we need the agency for?” Instead, they’ll see, “Our agency is on top of the strategy and makes sure the automation is serving our goals.” Also, don’t shy away from discussing how you stay updated with platform changes, run experiments, and cross-pollinate learnings from other clients or industries. Those are human advantages no single advertiser has on their own. We find that clients really appreciate when an agency can say, “we’ve seen how Google’s new feature XYZ works for others, and here’s how we’ll tweak it for you.” It reassures them that even as AI evolves, you’re the partner translating that into effective tactics for their business.

• Consider White Label or Partner Support to Scale: As a final note, if you find all this overwhelming – the constant monitoring, the need for new skill sets, etc. – remember that you can partner up. White label PPC providers (like That! Company, shameless plug) specialize in this balance of automation and human management. We act as an extension of your team, bringing seasoned PPC pros who wrangle Google’s AI daily. This means you can confidently offer cutting-edge PPC white label services to your clients, without having to build all the expertise and bandwidth in-house overnight. For example, our team at That! Company can handle the intricate day-to-day adjustments, script management, and data analysis, while you focus on client relationships and strategy oversight. The result is your clients get the best of both: the scale of AI and the care of experienced humans, all delivered under your brand. Whether you go that route or keep it internal, the point is the same – don’t hesitate to leverage outside tools or help. In the AI era, collaboration is key: man with machine, and sometimes team with team.

Turning Change into Opportunity

The bottom line for agencies is this: AI isn’t here to steal your job – but it will absolutely change how your job is done. Google Ads automation can feel like a fast-moving treadmill, but by applying the steps above, you can turn it into a vehicle for even better client outcomes. Agencies that embrace AI’s strengths (speed, scale, data crunching) and shore up its weaknesses (strategy, creativity, context) are not only delivering superior results but also carving out a clear value proposition that clients understand. In our experience, once a client sees that thanks to your team’s oversight, their cost per lead dropped 20% while lead quality doubled – achieved by working with the AI, not against it – they become clients for life.

So rather than fighting the tide of automation, ride the wave and guide it. The tension between AI and human control can actually be a creative tension that pushes your agency to innovate services and optimize processes. It’s a chance to do what we do best as marketers: solve problems in novel ways (now with some robotic help). And let’s admit, it’s also a bit fun – after all, who doesn’t like having a super-smart assistant (that never sleeps) to handle the drudgery while you focus on big ideas?

If you found these insights useful, there’s a lot more to explore. We’ve put together a comprehensive Tech Briefing PDF that dives deeper into the data and strategies for mastering the AI-human balance in Google Ads – it’s essentially a playbook for agencies in this new era.

You can download the full Tech Briefing on our site for free. It’s packed with statistics, trend analysis, and actionable tips to help you stay ahead of the curve.

And of course, if you ever want to talk one-on-one about leveling up your PPC services, That! Company is here to help. We partner with marketing agencies like yours to deliver white label PPC solutions that marry cutting-edge automation with savvy human management. In other words, we practice exactly what we’ve preached in this article. Feel free to reach out to us to see how we can help you scale your clients’ results (and your agency) in the age of AI. The world of Google Ads may be “run by algorithms” now, but with the right approach, your agency can ensure those algorithms are working for you – and not the other way around. Here’s to human expertise and AI working hand in hand for better PPC success!