• by Laurie Sullivan  @lauriesullivan, January 22, 2025

The ad-click growth rate rose 3% YoY for the third straight quarter on Google, but the cost-per-click (CPC) growth rate continued to decline after peaking in early 2024.

The average CPC for Google search ads rose 7% in Q4 2024.

Advertisers spent 10% more in Q4 2024 for Google search ads, compared with the year-ago quarter. Services include text, Performance Max, and standard Shopping campaigns.

The year-over-year (YoY) increase declined slightly from 11% growth in the previous quarter, according to data from Tinuiti

“Google’s core search ads is seeing slower growth, which isn’t surprising,” said Mark Ballard, research director at Tinuiti. “They are seeing success in Performance Max.”

Performance Max continues to dominate Google’s shopping ads, with more than 95% of retailers adopting the format by year-end 2024 that Tinuiti supports.

The format now generates 67% of Google shopping ad revenue for retailers.

Interestingly, nearly 30% of Performance Max spend was attributed to video and other non-shopping inventory.

Video and other non-shopping search and display inventory accounted for a little under 30% of Google Performance Max spending in Q4 2024 -- up slightly from a quarter earlier. Video spend share has largely held steady at around 5% since late 2023, but other non-shopping sources, including text ads, saw a rising share of Performance Max spend during most of 2024.

Despite the uptick, the amount spent by advertisers across Performance Max and standard Shopping campaigns slowed to 10%.

Also of note, Ballard said Google faced less competition from Temu in Q4 2024 compared with a year earlier.

Google’s shopping ad-click growth rate fell to a mere 1% in Q4 2024, compared with the year ago, and down from 6% a quarter earlier. The average shopping ad CPC growth rate remained steady at 9% YoY.

Like Google, Microsoft saw stronger growth on pricing rather than the volume, as the average Microsoft search ad CPC rose 11% YoY.

Clicks fell 3% YoY. Microsoft’s search ads display across Bing, Yahoo, and DuckDuckGo, as well as other smaller sites.