Have you noticed your Google Ads costs creeping up while lead quality seems to be going down? Are you getting more clicks but fewer conversions? Many businesses are struggling with rising cost-per-lead, declining search traffic, and an influx of low-quality leads.

Artificial intelligence (AI) and machine learning (ML) are reshaping how Google Ads campaigns are run. Automated bidding, AI-generated ad copy, and Performance Max campaigns promise efficiency and scale, but are they always delivering the right results? While AI can help optimise performance, our Google Ads specialist, Sasha Budd, discusses how “it’s important to approach these changes with caution to ensure you’re getting high-quality leads - not just more of them”.

At Firefly Digital, we know that staying ahead of these challenges is key to maximising your Google Ads return on investment. As a leading digital marketing agency in Auckland, we’re seeing shifts in how businesses should approach paid search - especially with the increasing role of AI and ML in campaign management.

Let’s look at how AI is changing the Google Ads landscape, and what you can do to maintain your campaigns results. 

AI in Google Ads: A Double-Edged Sword

AI-powered automation has transformed Google Ads, making campaign management more efficient. Features like Smart Bidding, Performance Max campaigns, and AI-driven ad copy generation allow businesses to reach wider audiences with less manual effort. These tools promise better targeting, real-time bid adjustments, and improved ad performance.

But here’s the catch: while AI-driven campaigns can generate a high volume of leads, are they actually the right leads for your business? Performance Max, for example, casts a broad net across various Google platforms, which can result in an increase in traffic and leads, but we often see businesses struggling with lead quality. More leads don’t necessarily mean more sales.

While AI can streamline bid strategies and ad creation, it also poses risks. AI-generated ad copy may be irrelevant or misaligned with your brand’s message, leading to wasted ad spend or confusion among customers. Additionally, automated bid strategies can change without approval, potentially shifting focus away from your core business objectives. Without careful monitoring, these automated adjustments can prioritise short-term metrics over long-term profitability.

At Firefly Digital, as a Google Ads agency, we help businesses strike the right balance by:

• Refining AI-driven strategies to ensure quality leads, not just quantity.
• Layering audience targeting to filter out irrelevant traffic.
• Monitoring lead sources to identify where conversions are truly coming from.
• Keeping in close contact with our clients to monitor lead quality.
• Combining AI with manual oversight to keep campaigns aligned with business goals.

Privacy Changes and First-Party Data Matter More Than Ever

With third-party cookies being phased out, relying solely on Google’s AI for targeting becomes risky.  Businesses that invest in their own first-party data - through CRM systems, email marketing, and customer insights - will have a competitive advantage. First party data is data that you have collected directly from your customers, which may include demographics, interests, purchase history and website activity. This data is the most accurate and reliable data available that can provide immensely valuable insights.

By focusing on building strong customer relationships and leveraging first-party data, you can create more precise audience segments and reduce reliance on AI-driven automation, ultimately improving results.

Search Campaigns Are Still Essential

While AI-powered campaigns have their place, traditional search campaigns remain an important part of most Google Ads strategies. Why? Because search-based ads target users who are actively in market for your services, resulting in a higher conversion rate and better quality leads.

We’ve seen businesses shift budgets heavily towards AI-driven campaigns like Performance Max, only to return to search when they realise their conversion rates have dropped. A balanced approach is key:

• Use search campaigns to capture high-intent users.
• Supplement with Performance Max but refine targeting to avoid irrelevant traffic.
• Ensure your landing pages and website content align with search intent to maximise conversions.

By effectively balancing intent-based and broader campaigns, an experienced Google Ads agency like Firefly Digital ensures your strategy is well-rounded and focused on the right metrics for success.

Navigating the Changing Landscape

Google Ads isn’t getting any cheaper, and AI-driven automation isn’t a magic fix. It’s easy to assume automation will handle everything, but without a smart, hands-on approach, it can quickly lead to wasted ad spend and missed opportunities.

At Firefly Digital, we know the key to success is a strategic, data-driven approach that blends automation with human expertise - because no algorithm understands your business quite like you do.

• Review your lead quality: Are you getting the right customers, or just more clicks?
• Monitor AI-driven campaigns: Don’t let automation run unchecked—ensure it’s delivering real results.
• Keep search campaigns in the mix: They remain the best way to capture high-intent traffic.
• Leverage first-party data: Build stronger audience insights to future-proof your campaigns.

Want Better Results from Google Ads?

Navigating the constant changes in digital advertising can be challenging and overwhelming. At Firefly Digital, we take a hands-on, data-driven approach to ensure your campaigns aren’t just running - but delivering real, measurable growth.

By combining AI-powered tools with human expertise, we help businesses optimise ad spend, attract the right customers, and improve conversions. Whether you're looking to fine-tune your current strategy or build a new one from the ground up, we’re here to help.

Let’s chat about how we can make your Google Ads work smarter.