An interesting report from Tinuiti about what’s happening in Google’s ad space. Even though Google is throwing more cash at ads, the traffic isn’t keeping up. Here are some highlights:
1. Search Ads: In Q1 2025, spending on Google’s search ads shot up by 9% compared to last year. Most of that bump came from a 5% rise in the average cost-per-click (CPC), but the actual number of clicks stayed at 4%.
2. Shopping Ads: It’s good news for shopping ads—spending increased by 8% year-over-year. The click volume jumped by 9%, a nice change from the sluggish 1% increase in the last quarter of 2024. The catch? The CPC for these ads dropped just a bit by 1%.
3. Performance Max (PMax) Campaigns: These campaigns are gaining traction, with 93% of retailers jumping on board. But here’s the twist: they now only account for 53% of total Google Shopping ad spending, down from 69% the quarter before. Overall, PMax campaigns show mixed results with a 10% lower conversion rate, 13% higher CPC, and 7% lower return on ad spend (ROAS) than regular Shopping campaigns.
4. Competitive Landscape: Amazon still dominates the Google Shopping auctions, snagging about 60% of the impression share. Target and Walmart are close behind at 24% and 22%. Meanwhile, Temu’s practically vanished, dropping to zero impression share by mid-April 2025, probably due to those U.S. tariff changes.
So, what does all this mean?
While Google is boosting its ad budget, much of that increase comes from rising CPCs instead of traffic spikes. Advertisers pay more for clicks, but it’s not necessarily bringing in more visitors.
And the not-so-great performance of PMax campaigns is a heads-up for marketers. While they’re popular, they haven’t proven as effective as traditional Shopping options.
For anyone in marketing, this is a solid reminder to keep an eye on performance metrics and be strategic with ad spending, especially with the competition heating up out there!
