Google Ad Spend Grows Despite AI Changes
Google’s advertising landscape is showing remarkable resilience, with a notable 11% year-over-year increase in search ad spending for Q3 2024. This growth comes despite the challenges posed by AI-driven changes and a deceleration in pricing growth, as highlighted in Tinuiti’s latest Digital Ads Benchmark Report.
Key Takeaways
- Google search ad spending grew 11% YoY in Q3 2024, down from 14% in Q2.
- Shopping ad spend maintained a strong 16% YoY growth.
- Performance Max (PMax) adoption reached 92% among shopping advertisers.
- Major retailers like Amazon and Walmart continue to dominate shopping ad impressions.
- The impact of Google AI Overviews appears to be stabilising.
Overall Performance (Google Ad Spend Grows Despite AI Changes)
Google’s search advertising spending has shown a steady increase, with the following metrics:
- Search Ad Spending: Grew 11% YoY in Q3 2024, a slight deceleration from 14% in Q2.
- Click Growth: Remained stable at approximately 3% YoY.
- Cost-Per-Click (CPC) Growth: Moderated to 8% YoY, down from 12% in Q2.
Shopping Ad Momentum
Shopping ads have proven to be a stronghold for Google, with performance metrics indicating:
- Ad Spend Growth: Maintained a robust 16% YoY growth in Q3, matching Q2 performance.
- Click Volume: Improved to 6% YoY growth, up from 4% in Q2.
- CPC Growth: Decelerated to 9% YoY, continuing a downward trend.
Competitive Landscape (Google Ad Spend Grows Despite AI Changes)
The competitive dynamics in the shopping ad space reveal:
- Amazon: Dominated shopping ad impressions with a 58% share in Q3, down from 63% in Q2.
- Walmart: Holds a distant second position with a 22% share.
- Temu: Experienced a significant decline in presence compared to 2023.
Performance Max (PMax) Trends
The adoption of Performance Max campaigns is noteworthy:
- Adoption Rate: 92% among shopping advertisers in Q3, up 1 point from Q2.
- Non-Shopping Inventory: Reached 29% of PMax spend in September, up from 21% in June.
- YouTube Contribution: Only 1% of PMax placement impressions.
- Mobile Apps: Maintained a steady 10% share of impressions.
Campaign Performance Metrics (Google Ad Spend Grows Despite AI Changes)
Despite some challenges, campaign performance metrics indicate:
- PMax Conversion Rates: Fell 2% below standard Shopping campaigns in Q3.
- Sales Per Click: Shifted from +3% to -3% versus standard campaigns.
- Return on Ad Spend (ROAS): Remained stable quarter-over-quarter.
- Traditional Text Ad Spending: Grew 7% YoY, down from 13% in Q2.
Impact of Google AI Overviews
The introduction of AI Overviews has had mixed effects:
- Mobile Non-Branded Keywords: Saw a 14% decline in click-through rates (CTR) from April to July.
- CTR Recovery: Observed in August and September across segments.
- Shopping Ad CTR: Rose 14% on mobile between April and September.
Conclusion: Google Ad Spend Grows Despite AI Changes
The data suggests that while Google’s AI Overviews initially impacted ad performance, advertisers are adapting and finding ways to maintain growth, particularly through shopping ads and Performance Max campaigns. The resilience of shopping ads amid broader market changes highlights the evolving landscape of digital advertising, where major retailers continue to hold significant influence.
Sources
- Google Ad spend grows despite AI changes, Search Engine Land.
Author
Search Blog
Free PPC Audit
Subscribe to our Newsletter
The Voices of Our Success: Your Words, Our Pride
Don't just take our word for it. With over 100+ five-star reviews, we let our work-and our satisfied clients-speak for us.
"We have been working with PPC Geeks for around 6 months and have found Mark and the team to be very impressive. Having worked with a few companies in this and similar sectors, I rate PPC Geeks as the strongest I have come across. They have taken time to understand our business, our market and competitors and supported us to devise a strategy to generate business. I value the expertise Mark and his team provide and trust them to make the best recommendations for the long-term."
~ Just Go, Alasdair Anderson