1 in 4 of Your Exact-Match Impressions Now Come From AI Max

Google's AI Max is now serving 1 in 4 of your exact-match ad impressions — and it's quietly reshaping Search and Performance Max campaigns. Chris and Mike deliver the AI Max deep-dive they promised last episode, breaking down exactly how that number gets generated and what it costs you in control.

Picking up where Alphabet's Q2 earnings call left off, this episode unpacks Google chief business officer Philipp Schindler's claim that AI Max is "unlocking billions of net-new searches that weren't really monetizable before." The mechanics: when there isn't enough auction competition for a search term, Google either skips serving an ad or falls back to ad-rank thresholds — AI Max exists to monetize that gap by expanding matching beyond your exact and phrase match keywords, using what's effectively broad match under a new name (officially "search term matching").

The numbers back it up. Across AI Max campaigns, roughly 80% of the additional impressions come from exact match terms and 20% from phrase match — and once AI Max is activated in a campaign running mostly exact match, about 1 in 4 impressions against those exact-match keywords now originate from AI Max instead of the keywords you actually chose. 

Chris and Mike weigh the real trade-off here: advertisers who deliberately chose exact match for control are being nudged toward broad-match-style reach, though the ad-group-level opt-out is a meaningful safety valve. Revenue uplift is real per in-platform attribution — but it's driving volume, not necessarily matching Google's claimed efficiency.

The second half tackles a related head-scratcher: click-through rates on Shopping and Max campaign types have climbed roughly 17-20% year-over-year for over a year — the opposite of what the "zero-click," AI-Overviews-kill-CTR narrative predicts. Chris and Mike test a mechanical hypothesis (impressions falling 10-12% YoY while clicks hold steady would produce this exact pattern) without claiming it's confirmed, and discuss why ecommerce commercial queries may be more shielded from the zero-click trend than informational, publisher-facing searches — for now.

If you manage Google Ads campaigns and want to understand what AI Max is actually doing to your account's match types, this is the episode.

Growing Ecommerce is brought to you by smec (Smarter Ecommerce).

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Mike Ryan: https://www.linkedin.com/in/mikeryanretail/

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Transcript

Intro — this episode's two topics: AI Max & a CTR mystery

SPEAKER_01 0:08

Welcome to another episode of Growing E-Commerce. Today we've got two topics for you. WTF is up with CTRs. We'll find out. Yes. Let's find out. They're going up, and it's interesting.

SPEAKER_00 0:23

Which, by the way, is good for Google.

SPEAKER_01 0:25

It's good for Google. Yeah. Well, we there's a lot. We don't okay. Yeah, sorry. Yeah. We don't know. And uh one in four exact match impressions are now expanded by AI Max. When AI Max is activated. We'll talk about those. This relates to some of the stuff we talked about in earnings last week. So I think it's very relevant. Yes. By the way, hello, sir. Hey Chris.

SPEAKER_00 0:49

Um, did you just get off your yacht? Uh yes, of course, man. I think it was the fitting outfit after our earnings call session. You know what I mean? Uh yeah. The Daniel right over there. So yes, of course. That's right. Jumped off my yard. I'm here for a podcast and then I leave again.

SPEAKER_01 1:07

Yeah, definitely. Well, it's it's summer anyway. So I'm I hope to get on the water um on my vacation coming up soon. Actually, I certainly will get on the water.

SPEAKER_00 1:15

Man, I think we are uh when is your vacation?

SPEAKER_01 1:17

We have your vacation should we say three, two, one? Yeah uh three, two, one. August seventh. Yes, and when is that? Hold on. Uh 3, 2, 1, 1, 1. August 26th. Perfect. Really? I didn't check it. Seriously. Awesome. We're both on vacation from August 7th through August 26th.

SPEAKER_00 1:36

Two and a half weeks. Well deserved, man. I'm talking about you. I didn't deserve it, but you you you you deserved it.

SPEAKER_01 1:42

We're gonna and we're gonna, by the way, prep some content as best we can to bridge the summer gap. Um there might be one week

AI Max explained: how it works and the 1-in-4 exact-match stat

SPEAKER_01 1:49

where Yeah, or there might be one week where we don't have anything, but we're trying to fix this.

SPEAKER_00 1:53

We we're trying to fix it, yeah. But man, um of course I I don't have a yard. Uh I will never own one, but at least I have uh a jersey which might make some people think I have a yard. Exactly.

SPEAKER_01 2:08

Life quality. Yeah, I mean, why why would you need to own a yacht if you can look like you own a yacht? Doesn't really matter, does it?

SPEAKER_00 2:15

All right, right. Now um what uh the the let's start with AI Max for search or AI Max for search.

SPEAKER_01 2:22

Speaking of people who own yachts, own yachts, some googlers, googlers probably, yeah.

SPEAKER_00 2:27

Um mate, I had a question last time uh and you were about to answer it, but then actually we I wanted I uh we had some other topics to discuss. Mike, but my statement in in the last um earnings call session where we talked about uh uh the big G Google and why we or I believe that their their capex is justifiable because it it it flows into the core core business, and the core business is a fucking flywheel and it's it's producing it's printing money and creating client value. And one reason why their search business is still doing so well is the IMX or search. One of I would say the three most important campaign types they're investing in right now. And the statement was uh I think you quoted uh one of one of the Google guys. It it creates Yeah, exactly.

SPEAKER_01 3:22

So let me check here. Yes, please it monetizes uh hold on, I've got I've got the quote. So just we we mentioned this last time, but there there was an analyst who called in on the earnings call, and he asked basically, how is it even possible that Google can still grow this much? Yes, how is it even possible? And their chief business officer, Philip Schindler, answered, um, and then we have our AI-powered campaigns like AI Max that help advertisers actually adapt. It's referring to AI search and find the opportunities beyond keywords. Read into that what you will. AI Max continues to unlock billions of net new searches that weren't really monetizable before.

SPEAKER_00 4:08

Yeah. Hell of a statement. Yeah, hell of a statement. And uh, my question question was based on that statement, by the way, shout out to Mr. Schindler. I really I follow this guy, he knows his shit. He's a smart guy, he is uh awesome, awesome dude. Um, besides that, they have a they have an awesome product which seems to be doing well for them, which is the Amex search. So monetizing billions of of net new search terms. How does this work? What is the Amex doing here?

SPEAKER_01 4:40

Yeah, so basically the problem is that there were searches that no one was bidding on, basically, or not enough people in some cases. So if there's not enough competition in an auction, um it's possible that Google won't be able to serve an ad there, or they'll have to use fallbacks, like instead of having a real auction, they'll have these so-called ad rank thresholds, which are basically more or less minimum bits. Um and yeah, now like he's he talked about moving, finding opportunities beyond keywords. So one of the core features of AI Max is basically broadmatch. They call it search term matching, but underneath the hood, it's basically broadmatch. So if you have a campaign that has um a lot of exact match keywords in it, some phrase match keywords and few or no broad match, you know, that's who they want to, that's exactly who they want to reach. Because um, without broad match in there, they need that to do this kind of canvassing and to find these these search terms. This will, when you have this activated, it will basically broad matchify your exact match. Your exact match or your phrase match. And we we talked about that earlier in the year. Um can't remember the stat, but uh, yeah, I think yeah, that's right. It was about like when you look at AI max match type, 80% of those impressions come from exact match, and 20% of them come from phrase match. It can't expand on broad match because it's already brought it's already broad. Yeah, but that's that's what it's doing. That's a big part of what it does. It also has this separate feature about landing page targeting and stuff like that. I was inspired by Mr. Schindler's statements after looking to this. And I found that sure enough, when AI Max for search is activated in a search campaign, and there's a lot of exact match keywords or whatever, one in four impressions against exact match keywords actually came from AI Max. So that number's been climbing up over time. So the adoption is rising, but also the activity of AMAX. Yeah, inside of these campaigns, it's really scaling up now. And so this must be what he means.

SPEAKER_00 7:02

And by the way, I mean, look, I mean it it makes perfect sense from a business perspective, right? Because I I assume the AI is so good that the search term matching does its job, and and then why not showing an ad for a search term that the exact match is no fit, but yeah, there there is some some some relation there. So from a business perspective, it makes perfect sense. What I was wondering is, Mike, if if if I'm if if if I were were now uh um head of paid media and or and and rather a super operational technical guy, I have my my search set up and I'm already using broad match for for a good reason. I probably will have my exact match keywords for a good reason as well, right? Yeah, yeah. So so so the what what I'm referring to is and I'm not even wanting wanting to tap into the performance of the IMAX because we had a chat about that. They're outliers, we know the average, and I think the IMAX campaign type is is going well in the right direction. But I want an accept match type for a reason, in some cases, can be, sure. Do you see a a danger here or a trade-off? You just have to accept.

SPEAKER_01 8:12

Yeah, I mean good Google's target audience here is really people who haven't used broadmatch yet. They're not using it. And I think this is a bit of a dilemma for them because they're probably not using broadmatch because they don't want to. Um, and I don't know if you'll

AI Max's trade-off: Broad match risk & the ad-group opt-out

SPEAKER_01 8:27

somehow change their mind by offering them AI max instead. Which is forcing them to Yeah, which is it's basically a not it's just broad match in disguise. In disguise, yeah. And so I think that's a problem for them because like that, they have Google will say those people have the most opportunity. They potentially have some risk too because it's it's a big change to the campaign if it's if it's fully exact matched out or something like that. It's true that there's opportunity, but also risk. Like, whereas people who over the years have purposely and strategically and intentionally transitioned to broad match, the funny thing is that they are the ones who are adopting this first because they're they're adopters. But the you know, that there's a little risk there because exactly as you said, like if they they've chosen their broad match keywords, they might still have some exact match, and there's a reason why. But you know, the the nice thing about this is that um you can opt out at the ad group level. So there's a control there. Like you it it by default will apply to your entire campaign. But you can do something else. But if you have exact match where you you say no, this is exact match for a reason, you can protect that.

SPEAKER_00 9:42

From that perspective, you could argue that IMAX is precisely doing what the IMAX claims to do, which is driving incrementality. And of course, incrementality is coming through search terms you are maybe not covering right now. Yeah. And I would argue if you if I can control it, Google I actually shouldn't hold back.

SPEAKER_01 10:04

No, I I think it's I think it's a you know, which again the performance claims we don't want to but we saw that a revenue uplift is real, at least according to in-platform attribution, sure. Knowing the limitations of that, you should also check in your back-end sales numbers, but it is driving more volume, and that's what it's supposed to do. It's not as efficient, which is my beef with Google is that they claim it will be very same efficiency level. Yeah, but that's not true. No, but it does it, you know. I think from Google's standpoint, of course they want to monetize this, and there is something real happening here. Like, is AI search overhyped? I don't know, maybe a little bit, but a lot of people are indeed searching differently, longer, more specific queries than they used to. Yes. And it's pretty factual that your keywords might miss that stuff. Yes. So especially, yeah, these exact match things and stuff. You can't exact match these things, it's not possible.

SPEAKER_00 11:00

So yeah, well, I mean, um uh Mr. Schindler is spot on here. Yeah. And again, I I I I love it from uh from a pure business perspective. They're investing in these campaign types, they're implementing them and they're making it and and they they impact not just the everyday life of of the consumer, yeah, the online marketer, but also for their business. For sure. It's man, you hats off to them.

SPEAKER_01 11:26

Yeah, I mean they're trying to like people will debate whether or not AI powered search results are better, but they're but I personally like them a lot. Yeah, yeah, yeah. For sure. And I can understand that they're problematic too, but as a user, I do like them.

SPEAKER_00 11:41

And it feels seamless. I mean, let's face it, it's not like it's disrupting my my my search experience. Not at all.

SPEAKER_01 11:47

No, you can always scroll past, you can still click on things. Yes.

SPEAKER_00 11:50

Um, but no man, they're they're doing great. It is what it is. And again, uh they I think they learned their lessons because the the the possibility to opt out on that group level is just a powerful one. Yeah. There's actually no argument not to use Aimex to search.

SPEAKER_01 12:06

I mean, there there's there are controls in place, and if you don't like it, you don't no one's gonna make you use it. But there I think compared to how PMAX shipped, and PMAX was a forced migration of a very popular, for better or worse, a very popular campaign type. Um, this is much more finished. It doesn't feel half-baked. It feels like they learned their lessons, they shipped a more mature product, um, and they it was transparent from the start. I'll give them credit for that. That's how I was able to analyze the performance because it's transparent.

SPEAKER_00 12:39

It's transparent, yeah. Nope. All all good here. I think uh not too big of a controversial take on this, right?

SPEAKER_01 12:46

It's no, I mean I think some people will be super aggravated to see that one and four exact match is but then do something about it. You yeah, yeah, this is the direction of travel. So I would not fight it personally. Um let's talk about the other topic with Yes, CTRs. So um the click-through rate. Yeah, the click-through rate. All right. So we have this free tool called SMEC Market Observer, um, where you can see like benchmark data based on our advertiser panel. Um and yeah, like you can see click-through rate

The CTR mystery: up 17-20% year-over-year, and why

SPEAKER_01 13:26

for shopping, PMAX search, you can see conversion rate, all kinds of stuff. It's handy to look at.

SPEAKER_00 13:31

I would rec I'm literally would recommend everyone to to use that. Yeah, it it helps you so much in in benchmarking your numbers, in arguing upwards, downwards trends, uh, whether you're an operational level or management level. Um it's it's a massive. I I really love it. It's a great tool.

SPEAKER_01 13:49

Definitely. We built it way back in the pandemic, and yeah, it's still around.

SPEAKER_00 13:53

So something by the way, still free to use. Yeah. You will never know when this changes, so I would would sign up for it. Yeah, exactly. All right. So and we see in this in these numbers uh a trend which doesn't make too much sense.

SPEAKER_01 14:08

Well, it's interesting. I mean, we've been seeing for a while now um substantially higher click-through rate year over year. Year by year, yeah. Yeah. And like for PMAX, it's been pretty consistently on the order of 20% year over year. And and it's just like that since for for over a year now. It's been like that for a while. And I don't know. I've I never dug into it that much. I like I've been wondering and seeing if it like what would happen there. But then it's funny because our friends at Optimizer, they reached out to me for a report they're working on, and they had some e-commerce data for Google Ads, and they wanted me to give a quote to put in the report. And by far, the number that stood out the most was click-through rate. And it was up 17% year over year, very consistent with what we see. They're well, I think they're quite international, but very US-based. We're more European-based. Well, this is really weird. What's going on here? You know, you never you never know, like, because this is like but it's just, I was like, really, we're seeing this super consistent result. So I started digging into a bit more. I got curious, and um I don't have the answer here why it's like that. But the funny thing is that most people are very concerned right now that click-through rates will drop. Yes. They're concerned that ads next to AI information will not get clicked as much, just the way that organic clicks don't get clicked as much. The zero-click thing we've talked about many times before. Um, they don't know like early data from OpenAI looks like click-through rate is bad. Um Google, I think, implicitly has a click-through rate problem inside, like with ads inside of AI overviews. That's why we see them investing in new ad formats. You know, why would they do that if the ads were working? Of course, yeah. They need they need to boot to boost the click-through. But then we're seeing that in in shopping and PMAX campaigns, click-through rates going up. Interesting.

SPEAKER_00 16:06

Yeah, it's weird. It doesn't, it doesn't, it doesn't make too much sense. Because uh and again, I I hold us accountable uh to what we have actually been been been saying that this is one one of the risks Google has to mitigate in order to keep keep the the growth trajectory where it is right now. Uh and and that's precisely that to keep the click through rates at the levels they are right now, unless they can massively um increase their impressions. Um that is the the one major thing you have to look at. We both said there is a chance, especially in these enchanting surfaces, that of course the zero click events will be organically growing because you have all the information right there and you don't need to click anymore. Well, as far as I see it, I mean, look, the night is still young, but the opposite is happening. And it I mean, I mean, let's face it, a 20% year-by-year increase in the click-through rate on average is not just a minor thing.

SPEAKER_01 17:09

No. I mean, what I will say is that the the range of like click-through rates operate at a range of like you know, 1.6% to 2%. And like so, in percentage points, it would be a small number, like half of a percent or something.

SPEAKER_00 17:26

But uh but this is but the relative growth is massive.

SPEAKER_01 17:30

The relative growth is massive, and this this matters a lot because um clicks are a high volume metric. Yes, and so a small change in that percentage has a big impact on the overall volume.

SPEAKER_00 17:41

Basically, the strongest indicator for the share wallet for Google for sure. It's it's the click which is the monetizing artifact they want. So a click through rate going up in this new Atlantic wave Google is is riding on. It's a mess, it's a massive statement. If I you know what's what's so funny? Uh I'm always wondering these these I mean, I I know for sure I'm following a lot of investors, and and there are so many bad analysts out there you can't even imagine. I don't know if the click through rate has been discussed uh at the earnings call. I don't think so. We can we can look it up, but if I were there, this would be my first question. Guys, what's going on here? This this would be for me one of the but the biggest bullish signs that the the growth trajectory is is cemented. If if you can keep this up, uh it's it's it's it's funny, right? It was not yeah, not really.

SPEAKER_01 18:40

I I think um this was uh probably a year ago or something. Someone someone that the question has come up before, but um no, in my opinion that something analysts should just keep pushing, pushing, pushing every quarter.

SPEAKER_00 18:55

I mean our sample is super huge, yeah, but again, we've we're still a fraction of the wall because so I don't know what the wall click click-through rates of Google are, but that's super interesting. And for me, it doesn't make too much sense. Yeah. What is the hypothesis?

SPEAKER_01 19:09

You have do you have one? I I have a little well, I have more questions. I mean at least one hypothesis. Yeah. So um the click-through rate is the ratio of clicks to impressions. So if you do that as a fraction, the impressions are the denominator. Yes. And what I noticed is that clicks are have been let's say it's varied a bit, but they've been sometimes slightly down, sometimes a bit up. Um but impressions have been notably down, um,

Testing the hypothesis: falling impressions, not real growth

SPEAKER_01 19:45

like 10, 12%, quarter after quarter, year over year. So impressions for some reason are down, which is also weird interesting because that contradicts a bit earlier what we were talking about with Philip Schindler. Um I I I don't know quite what to make of it all. So you're that would imply that there's a shrinking denominator.

SPEAKER_00 20:06

Okay. So you but that's basically a purely mathematical hypothesis. The impressions are down, clicks stay roughly the same, and that's the problem. Then it's a mechanical or mathematical, yes.

SPEAKER_01 20:17

Yeah, exactly. But the you know, why could impress impressions be down? I mean, another thing that I think could help maybe account for some of this, um, people are often talking about the click-through rate on these, like to the web on organic, like you know, an AI, someone has an informational query, an AI overview is served. No one clicks through to any of the publishers or content creators or whatever, and they're talking about the click-through rate in that sense. But for e-commerce, this isn't always the case. It's often an A or B thing where Google, and I think that will change over time, but Google is sometimes showing product listing ads, sometimes showing um an AI overview, depending on the query and whatever reasons they have for doing that. And you know, it can be that there's a portion of the of the sample that's sort of being removed and an alternative experience is being served there. This would be a hypothesis from my side. I think on the longer term, we know this is already happening in the in the US. Ads in AI mode, for example, are starting to actually scale up. Scale, yes. And that will come to Europe as well. So I think they will move away from this either-or experience. But yeah, so it's not really quite an answer, but it's what I'm thinking about.

SPEAKER_00 21:42

What up what I'm I might go on uh go out on a limb here, but what what I what I would stand by is that the the the flywheel we are constantly talking about the seamless integration of this new AI search um products. Uh I think long-term impressions will go up because the Google product is just superior to any other search product there there is. Um I stand by that. And I stand by that the question is how Google will play it, but I I still think the way they are on right now, they are moving down the road of the zero-click event. Still in some way, short, shape, or form, right? Universal card, all all the things which got shipped, the click on an ad to go to a website will become less important. So I think the this long-term trend, I would still rather believe impressions up, clicks down, lower click through through it, which I would be most concerned about. Okay, what does that mean for the business model for Google?

The long-term stakes for Google's business model

SPEAKER_00 22:43

Because uh less clicks mean less money as of today.

SPEAKER_01 22:46

Yes, yes.

SPEAKER_00 22:47

So super interesting. Man, we we have to to keep an eye on that for sure. I'm really, really interested here.

SPEAKER_01 22:52

We we will, and I'm just waiting for the day that Google adds more transparency. Because you know, we were just talking that AI Max was kind of born transparent. Um, but right now this AI surfaces part is the new black box.

SPEAKER_00 23:08

When when are the the AI uh surfaces insights are are are available? Um well I think we talked about it, but only US, right?

SPEAKER_01 23:16

Yeah, that that is uh it's di it's a different data set in the end. But um, and unfortunately I found out they're not including paid in there. Okay. Um it's just the organic stuff. Okay. Yeah.

SPEAKER_00 23:28

But at least I I get references to write my data of equality, which attributes matter. Yeah, exactly. Um let's end on a positive note. That's right. Anything else? Okay.

SPEAKER_01 23:43

Um Can you say something negative, Chris?

SPEAKER_00 23:45

Yes. I don't have a yard. You don't have a yacht. No.

SPEAKER_01 23:49

That's negative. Yeah. Well, it depends. I mean, I assume it's I think it's negative. You know what life would be. We also said when we hit 100 episodes, we're going on a boat. So Yeah, maybe. Maybe. Yeah. No, not maybe. You said it. Yeah, okay. Okay, we'll we'll have to I don't have SMEC marketing budget or a similar, similar jacket here, Mike. I will. I will. All right. Thanks, Chris. Rose of Flashes, sir. Thanks everyone for listening. This has been another episode of Growing E-Commerce brought to you as always, as by SMEC, also known as Smarter Ecommerce. You can learn more by visiting smarter e commerce.com. And we really appreciate it if you leave us a shout out, a comment, a review, a rating. You know what to do. Thanks. We'll see you next time.