• by Laurie Sullivan , Staff Writer @lauriesullivan, 11 hours ago

Google Ads are seeing better conversion rates despite costs rising across nearly every industry so far in 2025. It's not clear whether artificial intelligence (AI) is playing a role in the increase. Executives have said advertisers may experience fewer clicks despite higher conversions than in the past. This may become the new normal as more AI becomes more integrated into search.

Sixty-five percent of industries have turned more clicks into customers, despite 87% of sectors seeing higher cost-per-click rates, according to LocalIQ’s analysis of 16,446 campaigns between April 2024 through March 2025.

Search advertising costs have increased year-over-year (YoY) for the past five, and LocalIQ’s latest data shows this trend continuing.

Cost per leads (CPLs) did not increase as drastically in 2025 as in 2023 to 2024, suggesting a little more stability in the paid-ad space, the report notes. The average cost per lead rose 5.13% YoY to $70.11, up from $41.40 in 2021.

The average click-through rate (CTR) rose 3.74%, but when broken down by industry, just a little more than half saw CTRs fall, while 48% saw either stable or increased.

The average cost per click (CPC) in Google Ads rose 12.88% year over year (YoY) to $5.26. Of those, the average overall CPC rose for 87% of industries analyzed.

Education & Instruction, and Beauty & Personal Care, experienced increases of more than 40%. This is in line with data last year, where CPCs rose for 86% of industries. The continuing increase in costs is likely due to crowded and unstable search engine result pages (SERPs), and increased competition, per the report.

Conversion rates rose for 65% of industries. Fifteen out of 23 analyzed experienced increases in conversion rates (CVRs) YoY. This comes after a decrease for most industries in 2024.

Sports & Recreation, and Education & Instruction, saw CVRs rise more than 40%.

Cost per leads (CPLs) rose for 13 out of 23 industries, with an average increase around 5% YoY. Last year CPLs rose 25% on average.