12 March 2025

Google’s new ad auction model

In summary

• Google has provided updated information on how its search algorithm works
• The new auction model can generate multiple impressions per search, inflating impression counts while actual user intent remains the same.
• While the exact timing of this change is unclear, this change will alter how we measure search ad performance. Advertisers must adapt now to ensure their campaigns remain efficient.

What Google’s updated search documentation reveals

Google recently updated its documentation, revealing that it now conducts separate ad auctions for each ad location on the search results page. This means that ads appearing at the top of the page are determined by a different auction than those appearing at the bottom or in other positions.

While an advertiser’s ad will still only show in one location at a time, a single search could now trigger multiple impressions in different locations. This change has far-reaching implications for advertisers and the broader Search ecosystem.

What this means for advertisers

For the longest time, a search impression in Google Ads meant that a user performed a query once, and an ad was displayed in response. That impression was a reliable indicator of search demand and intent.

However, with this update, Google’s new auction model can generate multiple impressions per search, inflating impression counts while actual user intent remains the same.

This shift could significantly impact key performance metrics, including:

• Impressions as a demand signal – impressions may no longer directly correlate to unique searches, making it harder to gauge demand and intent.
• Click-through rate (CTR) distortions – since a single user can see multiple impressions, CTR could decline artificially, leading to misleading performance assessments.
• Overall increase in impressions but a slight increase in clicks – with additional exposure from multiple ad placements in a single search session, advertisers should expect an increase in impressions but only a slight uptick in clicks. This could lead to inflated impression counts without a proportional rise in engagement, making it necessary to adjust performance expectations accordingly.

More ad inventory = more spend – This change increases Google’s available ad slots, causing advertisers to spend more to maintain visibility across multiple auctions rather than just one.

Potential new metrics and adjustments

To counteract this shift, Google may introduce new reporting metrics like Unique Impressions, similar to how unique reach is tracked in Display and YouTube advertising. This would help advertisers distinguish between repeated exposure and actual user intent.

Additionally, advertisers who optimise campaigns based on impression share may need to reassess their strategies, as inflated impression counts could lead to misleading conclusions about competition and ad effectiveness.

The bigger picture: why did Google make this change

This update isn’t just a minor tweak, it’s a fundamental shift in how Search ads are served and measured.

By running separate auctions for each ad position, Google effectively increases the number of available ad placements without changing the number of searches performed.

This not only expands ad inventory but also creates new revenue opportunities for Google, as advertisers adjust their bidding strategies to maintain visibility in multiple auction environments.

Louder’s recommendation

Advertisers should:

• Monitor impression trends carefully – while the exact timing of this change is unclear, advertisers should expect impression counts to rise, but don’t assume increased demand. Look at CTR, conversion rates, and other engagement metrics before making campaign adjustments.
• Adjust bidding strategies – if using Impression share automated bidding, keep an eye on how inflated impressions might impact performance targets. Adjustments may be necessary.
• Advocate for more transparency – Google may need to introduce new metrics or clarify how advertisers should interpret impression-based signals moving forward.

Key takeaways

• This change presents both new opportunities and challenges for advertisers. On the positive side, expanded ad placements allow for greater visibility across different positions, potentially helping brands reach users at multiple touch points in their search journey. Advertisers who adapt their strategies wisely might be able to take advantage of this increased exposure.
• However, let’s be clear, this benefits Google far more than advertisers. By fragmenting auctions, Google is not just improving the search experience, it’s creating more ad inventory to sell, increasing competition, and ultimately driving up advertiser costs. More impressions mean more chances for advertisers to bid against each other, leading to higher CPCs without necessarily delivering more conversions.
• At its core, this shift is about monetising Search more aggressively, ensuring Google extracts more value per search query while advertisers scramble to adjust. While there are ways to adapt, advertisers must remain vigilant, push for clearer reporting, and rethink how they measure success in this evolving landscape.

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