If 2024 was the year Google introduced AI-powered campaigns, 2025 was the year they became the preferred path.
Google did not just roll out new features. It changed how paid search works. Automation moved from helpful to expected. Manual controls shrank. AI stopped assisting and started choosing. Google's message was consistent: Smart Bidding and AI-driven campaigns deliver better results. The problem? Automation didn't guarantee success. Advertisers with strong fundamentals saw impressive gains. Those without them lost ground quickly. The difference came down to understanding what Google's automation actually required, and what it couldn't fix.
2025 Was the Year AI Took the Wheel
Google’s direction was clear throughout the year: manual options are becoming increasingly limited, while AI-powered campaigns are taking center stage.
Enhanced CPC disappeared. Call-only ads got a sunset date. Campaign creation flows nudged advertisers toward automated formats. The message was consistent. This is where paid search is going.
At the center of it all was Google’s Power Pack approach: Performance Max, Demand Gen, and AI Max for Search.
Performance Max continued expanding as the all-in-one campaign type. Demand Gen evolved as a discovery-focused channel. AI Max entered as a Search feature suite promising broader reach through keywordless matching, automated copy, and dynamic landing pages.
For accounts with clean conversion tracking and strong first-party data, results improved. For accounts without that foundation, performance became harder to control.
AI did not fix broken setups. It amplified them.
The Cost of Automation
Google framed 2025 as a year of efficiency. Advertisers felt the cost side more clearly.
Average cost per lead increased year over year, with some verticals, such as retail, seeing 40–50% increases in CPCs over the past five years. While reporting improved, automated campaigns still required a level of trust many advertisers weren’t prepared to give.
Performance Max remained the clearest example. Even with improved reporting, the system required trusting algorithmic decisions over manual intervention. When results dipped, the solution was often to wait for the system to learn rather than make strategic adjustments.
Automation delivered scale, but it demanded surrendering control. In 2025, advertisers had to decide whether that tradeoff made sense.
Brands with authentic, involved, and vocal communities saw significant performance improvement. Brand communities also benefit the brand by providing endless UGC, instant feedback, and primed audiences to assist paid social efforts.
What Actually Worked in 2025
AI Overviews Opened New Visibility, With Limits
Ads expanded into AI Overviews across more devices and regions. When they appeared, they mattered. These placements show up before users scroll and influence decisions early.
The challenge was consistency. Advertisers could not control when AI Overviews appeared or measure performance in a meaningful way. There was no way to optimize directly for them.
We treated these placements as incremental upside, not a strategy to chase. Strong fundamentals helped. Weak ones did not.
Performance Max Became More Practical
2025 was the first year Performance Max felt usable at scale.
Search term visibility improved. Channel-level reporting became clearer. Asset-level insights actually helped guide optimization. The controls that had always existed, negatives, demographics, search themes, finally had the transparency needed to use them effectively.
When paired with strong feeds, varied creative, and active management, Performance Max delivered. When treated as a set-it-and-forget-it solution, it consistently underperformed.
Creative Became a Performance Requirement
Google’s creative tools removed friction. Asset Studio and in-platform generation made it easier to produce volume quickly.
That mattered because automated campaigns need creative variety to work. Headlines, images, and video now directly influence performance.
The catch was quality. Some AI-generated creative worked well. Some felt generic or off-brand. In testing, assets generated without brand guidance often drove lower engagement and shorter performance windows. When creative inputs were structured and reviewed, we saw stronger CTRs and more stable conversion rates. AI helped scale output, but human direction made the difference.
The brands that performed best used AI for speed, not strategy. Human direction still matters.
Clean Data Became Non-Negotiable
AI-powered campaigns exposed data weaknesses.
Accounts with accurate conversion tracking and proper value assignment outperformed those without by margins exceeding 2x in many cases. Duplicate conversions, missing values, and weak signals led to inefficient bidding and unstable performance.
First-party data like Customer Match helped strong accounts get stronger. It couldn't fix broken fundamentals.
What Didn’t Work and Why It Matters
Blind Adoption of AI Max for Search
AI Max for Search launched in beta with significant buzz, but our early testing revealed clear limitations.
We saw irrelevant keyword matching, exclusions that were not always respected, and clunky setup flows. Automated copy sometimes missed brand intent entirely.
AI Max for Search showed promise as an expansion tool, not a replacement. Used carefully, it uncovered incremental volume. Used blindly, it created noise.
We will continue testing AI Max for Search in 2026, but with guardrails firmly in place.
Treating Performance Max as a Cure-All
Some advertisers tried to consolidate everything into Performance Max. Results usually suffered.
Performance Max excels at scale. It struggles with nuance. Brands with complex catalogs, promotions, or seasonal priorities still needed structured Search and Shopping campaigns.
The strongest accounts used Performance Max alongside other campaign types, not instead of them.
The Control Paradigm
The control paradox isn't going away. Google will continue removing manual options while adding "controls" that operate within automated guardrails.
The creative tension will intensify. As AI generates more assets, brand consistency becomes harder to maintain at scale.
AI optimizes for metrics. Brands care about positioning and voice. Those priorities do not always align.
Revel Interactive’s Bottom Line
2025 made one thing clear: automation is not the problem. Blind automation is.
The advertisers who succeeded weren't the ones who followed every Google recommendation. They were the ones who understood the systems, tested them critically, and intervened when automation couldn't account for business nuance.
2026 will reward that same approach. Clean data, varied creative, and strategic oversight will separate strong performance from mediocre results.
AI is powerful, but it still needs direction. The future of paid search isn't choosing between humans and machines, it's knowing how to use both well.
Sources
Search Engine Journal: What Google’s 2025 Year in Review Tells Us About the Future of PPC
Google Ads Help: About Changes to Google Ads Features and Automation
PPC Land: Google Phases Out Call-Only Ads by February 2027 in Push Toward Automation
Fluency: How to Automate Google Ads in 2025: Three Use Cases for Growth
This blog was edited with the assistance of Claude AI.
