Google Ads is experiencing rising Cost Per Click (CPC) rates and a decline in ad click volumes. Increased competition, evolving bidding strategies, and the impact of AI Overviews are all contributing factors. Enhanced search results provided by Google's AI can answer user queries without necessitating ad clicks, limiting the available click inventory. As ad supply diminishes while demand remains strong, CPC prices are driven higher. PPC experts suggest that smart bidding plays a significant role in these trends, potentially affecting high-intent keywords.
The rise of rich search results and answers, like Google's generative AI results, can satisfy users' queries without additional clicks.
There are signs that people are clicking on fewer search ads than before, which effectively reduces the available inventory of clicks.
When ad supply (clicks) tightens and demand (advertiser spend) keeps growing, CPC prices are forced upward.
CPCs are rising so clicks are falling unless the budget rises as well.
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