Google Search ad spend climbs 10% YoY, despite AI disruptions: report
Meanwhile, click growth remained steady and cost per click (CPC) increased, according to the latest Tinuiti report.
Advertisers are paying more for clicks while adapting to Google’s AI-driven changes, including Performance Max adoption and AI Overviews, according to the latest report from digital marketing agency Tinuiti.
By the numbers:
- Google search spending rose 10% year-over-year in Q4 2024.
- Click growth remained steady at 3%.
- Cost per click (CPC) increased 7%.
- Microsoft search ad spending grew 7%, with CPC up 11%.
The big picture. Performance Max (PMax) continues to dominate Google’s shopping ad landscape, with over 95% of retailers adopting the format by year-end 2024. The format now generates 67% of Google shopping ad revenue for retailers.
Why we care. Google’s push toward automation is showing mixed results. While PMax has improved its performance relative to standard shopping campaigns, the introduction of AI Overviews initially hurt click-through rates for text ads before seeing a rebound in Q4.
The competitive landscape:
- Amazon maintained a strong presence in Google shopping auctions.
- Temu significantly reduced its Google shopping ad presence, dropping to minimal impression share.
What’s next. With Google continuing to emphasize AI-driven ad solutions, advertisers will need to balance higher costs against improving performance metrics while adapting to new automated formats.
Related stories
New on Search Engine Land
About the author
In 2008, Anu's career started with delivering digital marketing campaigns (mostly but not exclusively Paid Search) by building strategies, maximising ROI, automating repetitive processes and bringing efficiency from every part of marketing departments through inspiring leadership both on agency, client and marketing tech side.