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Tips, Tricks, & Advice

The Real Reasons Behind Google Ads' Soaring Prices

The Real Reasons Behind Google Ads' Soaring Prices

by Kimberly Wright

2 weeks ago

Well, Google's cash flow is on turbo mode, hitting a massive $46 billion in search revenue, up by 14% from last year. Talk about hitting the jackpot! But hang tight, because there's a twist in this tale.

While Google's still swimming in cash, the mad dash for growth is losing steam. The market's getting crowded, and Google's starting to feel the pinch. It's like the thrill of a rollercoaster turning into a leisurely train ride.

Here's the juicy part: even though advertisers are splurging more on each click (up by 13%!), their overall spending isn't skyrocketing. It's like they're tightening their belts but still treating themselves to a fancy dinner.

But wait, did you catch that? Revenue's up by 14% and cost per clicks by 13% from last year. Coincidence? Maybe not.

With the rising cost per clicks, brands are feeling the squeeze, struggling to stay profitable and meet their goals. And guess who's feeling the heat? Google's revenue is taking a hit.

So, why the surge in cost per clicks? Well, there are a couple of factors at play here.

First off, let's talk about the introduction and increased adoption of Performance Max campaigns. These campaigns run across various platforms like shopping, search, display, discovery, and YouTube, with limited control for advertisers. This lack of control can lead to unintentional bidding wars and more competition for keywords, including branded terms. This is great for Google, but bad for brands, as they can mask increases in cost per clicks on keywords, and bid on keywords you may not want to bid on.

Secondly, economic changes are throwing a curveball into the mix. Layoffs and economic uncertainty are impacting consumer behaviors, leading to longer research phases and reduced searches for non-essential items. With fewer users in the pool, competition among advertisers is heating up.

So as a brand, why does this matter and what can you do about this?

While Google may not be your highest spending channel, that is even more reason to make sure you keep it efficient as it typically plays a critical role in your blended ROI or CAC goals.

Test different variations of utilizing PMAX. Test no assets and have PMAX function as shopping only. Test with no youtube assets. Test against shopping. Test with additional brand lists as negatives. Test various goals. Just keep testing! This is a newer campaign type and constantly changing. Nobody has the secret sauce. Every brand is different.

Trim the fat. Really analyze your performance. Beyond just keywords, look at the search terms, performance by device, day and time of day, before by demographic and trim out the areas that are not working.

Test new structures. Google has shifted to liking more condensed structures. If you have multiple campaigns with similar goals, combining these can help the campaign to have more data to learn from.

In a nutshell, Google Ads is experiencing a rollercoaster ride of highs and lows, with advertisers being left navigating through choppy waters. It's a game of strategy and adaptation in an ever-changing digital landscape.


Kimberly Wright is an experienced Paid Search Expert and PPC Manager at Big Pecan PPC. With a proven track record in driving lead generation and ensuring efficient ad spend through her strategic approach to pay-per-click (PPC) campaigns across various platforms. Kimberly excels in bid management, retargeting strategies, and other digital paid advertising. Her passion for search engine marketing (SEM) ignited early in her career, and she continuously learns and adapts to stay updated with the latest industry trends. Kimberly leverages her data-driven approach, campaign performance analysis skills, and commitment to delivering exceptional results to develop and execute successful paid search campaigns for diverse clients at Big Pecan PPC, making her a valuable asset to the company. 


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