Google recently introduced Auto Ads to allow Google to automatically publish ads on websites. The advantage for website owner is the ease of Google Adsense implementation, ad optimization as Auto ads will identify any available ad space and place new ads there, potentially increasing your revenue.
But, Google Adsense Auto Ads does not work with Blogger Blogs, another Google Product. (as on 2 June 2018).
To investigate, I digged in to the HTML code of blog posts and found out that there are no paragraph tags, instead there are only line breaks <br> and <div> tags.
For the purpose of testing, I manually entered some paragraph (</p>) tags in the blog post and published. Google Adsense Auto Ads appeared on those blog posts.
So, it looks like Google Auto Ads looks for paragraph (</p>) tags to display auto ads. Unfortunately, paragraph tags are missing in the Blogger editor. It would be tedious to manually go into each blog post to manually add paragraph tags.
To manually enter paragraph tags, you would need to click on the HTML tab.
Note: After adding the <p> tags, hit PUBLISH directly and do not go back to COMPOSE tab. Otherwise, the paragraph tags entered are stripped off if you switch to COMPOSE.
I have posted this issue in the Blogger Help Forums here.
If you are also experiencing the same issue, kindly go to the link and comment.