Posted 3 hours ago3 hr comment_11517 Google search ad spending grew 9% year over year in Q1 2025, according to new data from digital marketing agency Tinuiti. Increasing costs, rather than click volume, drove most of that growth. Google Search overall: Google Search spending grew by 9% YoY in Q1 2025 (down slightly from 10% in Q4 2024). Click growth was stable at 4% YoY. Whilst average cost per click (CPC) increased by 5% YoY. Google Shopping Ads: Shopping ad had a 8% YoY spending growth (however down from 10% in Q4 2024). Click volume improved by 9% YoY (up from just 1% in Q4). CPC remained stable at 1% YoY decrease. Competitive landscape. Amazon maintained a strong presence in Google shopping auctions with roughly 60% impression share against the median retailer, similar to Q1 2024 levels. Target held steady at 24% impression share (down marginally from 25% in Q1 2024), Walmart maintained 22% impression share year-over-year Temu dramatically reduced its Google shopping presence in early April following news of U.S. tariff changes, dropping to zero impression share by mid-April. Performance Max: 93% adoption rate among retailers running Google shopping ads Accounts for 53% of Google shopping ad spending (down from 69% in Q4 2024) Has 10% lower conversion rate than standard Shopping Has 13% higher CPC than standard Shopping Delivers 7% lower ROAS (return on ad spend) than standard Shopping Microsoft Search: 17% YoY spending growth (up from 7% in Q4 2024) 5% YoY click growth (improved from a 3% decline in Q4) 11% YoY increase in CPC Brand: Brand keywords saw particularly aggressive CPC increases, with costs for text ads containing an advertiser’s own brand name rising 19% compared to just 3% for non-brand keywords. Why we care. The latest trends show search platforms continue to extract more revenue per click, putting pressure on advertisers’ margins even as competition ramps up between Google and Microsoft. With Microsoft growth rate (+17% YoY) being higher than Google’s growth (+9% YoY), suggesting Microsoft continues to be a strong contender for marketing strategy. Political factors have also made a big impact, with Temu dropping out of shopping ads, therefore it’s likely there will be further shifts in Shopping traffic and costs in Q2 of 2025. What we’re watching: Performance Max adoption remained high at 93% of retailers running Google shopping ads, though its share of spending fell from 69% in Q4 2024 to 53% in Q1 2025 as some advertisers shifted budget back to standard shopping campaigns for greater control. Key takeaways. Shopping ads demonstrate resilience amongst fluctuating political mandates. PMax adoption remains high despite a decrease in spending due to performance deterioration compared to standard shopping. Major retailers maintain dominant positions in shopping ad impressions. Microsoft is seeing positive growth, which should help improve advertisers’ confidence and add the platform to their marketing strategy. Major retailers maintain dominant positions in shopping ad impressions. The report. Tinuiti’s Q1 2025 Digital Ads Benchmark Report. View the full article
