You may have already noticed it: higher costs for advertisements, but hardly any more clicks. Or you see that your Performance Max campaigns are yielding less and less return. New figures from Tinuiti confirm this trend: Google Ad spend is rising faster than traffic. And Microsoft Ads is growing faster than ever.
Rising advertising costs on Google
The Tinuiti report shows that advertising spending on Google Search increased by 9% in Q1 2025 compared to last year. Notably, this growth is primarily driven by higher costs per click. The number of clicks remained relatively stable with a 4% increase, while the average CPC rose by 5%. In Shopping Ads, there was an 8% growth in spending, but here too, price increases played a significant role.
Changing competitive landscape
Amazon remains dominant in Google Shopping, with approximately 60% impression share. Target and Walmart maintain their positions, but Temu has virtually disappeared after new U.S. import tariffs came into effect. This may lead to shifts in advertising costs and traffic in the coming months.
Performance Max under pressure
Although 93% of retailers use Performance Max, its share of advertising budget decreased from 69% to 53%. The performance is worse than that of standard Shopping campaigns: 10% lower conversion rates, 13% higher CPCs, and 7% lower ROAS. This leads advertisers to take a more critical look at their investment in PMax.
Microsoft Ads gains ground
Microsoft Search ads grew by 17% in Q1 2025. Here too, the cost per click increased (11% higher), but the click volume rose by 5%. Brand terms, in particular, showed a strong increase in costs, with CPCs 19% higher. Microsoft's acceleration in growth makes the platform increasingly interesting as a supplementary channel alongside Google.
Impact on businesses and organizations
For companies, this means that margins will come under further pressure. Rising costs without a proportional increase in traffic or conversions make it essential to manage campaign performance more critically. Additionally, the withdrawal of players like Temu can alter the competitive position in Shopping campaigns.