The Impression Share Report refers tells you the number of times that your ads are running divided by the number of times that your ads are eligible to run.
In other words, if you own an ice cream parlor and you buy the keyword “ice cream” on Google, and you have only a 10% impression share, then this means that 9 out of 10 people are typing “ice cream” in Google and NOT seeing your ad. 10% Impression Share means that your ads are only running 10% of the time when they are eligible to run.
A failure to understand how to use the Impression Share report(s) is one of the reasons why people get so frustrated with AdWords. For a mature AdWords account with a long history, you should really know which keywords are most important (through conversion tracking, e-commerce tracking, or even simply ‘voice of the customer’ polling) and which keywords are not. For the keywords you want to dominate, you should aim for 80%-plus Impression Share in your best region. After all, these keywords should be driving your revenue immediately in most cases (that’s why they are your best keywords) so budget should really not be a limiting factor. Once you get to keywords that you don’t know the ROI for, budget will obviously be a limiting factor. But at the very least you should know your best ad groups, and the Impression Share they are getting.