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Google Ad CPC Inflation in 2025

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Google Ad CPC Inflation in 2025

Google ad CPCs are rising in 2025. Get the details on how much ad costs have increased and see how it could be impacting your ad strategy.

Published: April 23, 2025

Automotive Internet Media | Digital Marketing Agency

Google ads cpc

Digital marketing costs can fluctuate, especially as the global economy changes. One trend advertisers are seeing this year is Google ad CPC inflation. Understanding this trend is crucial for automotive dealers. As costs change, one must evaluate the impact on expected outcomes and performance benchmarks. This article will delve into why Google Ad CPC inflation is happening, Google ads pricing trends, and strategies to manage advertising costs.

Understanding Google Ad CPC Inflation

A Google Ad CPC, or Cost-Per-Click, is the amount advertisers pay when users click their ads. In 2025, advertisers have seen increases in this across industries, including automotive. This inflation means higher costs to reach potential customers, thus a lower amount of results for the same budget. However, have performance targets decreased to account for this? Probably not. So dealers must spend more to maintain outcomes or adjust their advertising strategy.

The Current State of Google Ad CPC Inflation

Search Engine Land reviewed both Alphabet’s prior year data as well as their own client account data. They found that the average annual CPC increase from Google’s reports from 2019-2024 was 2.33%. However, when they assessed their own data, across industries, compared to this year they found an average CPC increase of 11.75%.

Automotive Internet Media has also seen rising Google CPC costs for search campaigns in 2025.

Factors Driving Google Ad CPC Inflation

Several factors contribute to Google Ad CPC inflation. Increased competition for keywords and search volume is a major driver. Economic factors, such as general inflation, impact advertising budgets. Finally, changes in Google’s own algorithms and ad formats can affect bidding, further altering ad pricing. These dynamics influence how costs fluctuate, making it vital for automotive dealers to stay updated and agile in their strategies.

Impact on Automotive Dealers

Automotive dealers are already feeling the pressure of looming tariffs and rising advertising costs are just a further challenge for dealerships in 2025. If a dealer heavily relies on Google to drive advertising traffic then Google CPC inflation is definitely affecting results.

How should a dealer navigate these challenges?

One way is to diversify their advertising strategy. Advertising on additional channels can help with efficiency. Specifically adding in a product like CarClicks that sends quality in-market shoppers to dealer inventory at a lower cost than most Google clicks is a successful approach. CarClicks is a great addition to a dealer’s marketing strategy, especially in times they need to further maximize ROI.

Conclusion: Staying Competitive in the Digital Economy

Understanding Google ad CPC inflation is crucial for dealerships to maximize their digital marketing budgets. By adopting strategic approaches, dealers can optimize costs effectively as the market changes and drive better results – even as costs increase.

Recent Posts

Google’s AI Overviews & AI Mode: How They Affect Your SEO

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Google’s AI Overviews & AI Mode: How They Affect Your Dealership’s SEO

Google’s AI Overviews, formerly known as Search Generative Experience (SGE), launched on May 14, 2024, reshaping search results and negatively impacting organic traffic, conversions, and revenue for businesses, including dealerships.

Now, Google has introduced AI Mode, a new experimental AI-driven search feature. While access is currently limited to U.S. users over 18 who opt in via Labs, it has the potential to impact search rankings and visibility.

Published: Mar. 19, 2025

Automotive Internet Media | Digital Marketing Agency

AI Overviews

About AI Overviews

AI Overviews leverage generative artificial intelligence to deliver quick, interactive responses, improving user experience but diminishing the visibility of traditional organic search results. Here’s how AI Overviews might be impacting your dealership’s SEO:

  • Declining Organic Traffic: AI-generated summaries appear above organic search results, potentially reducing the number of visitors to your website.
  • Lower Search Rankings: Even top-ranked dealership pages are pushed further down as Google prioritizes AI Overviews and paid ads.
  • Rising Advertising Costs: With Google monetizing AI Overviews through new paid ad placements, competition for visibility increases, making it more challenging—and costly—to outrank competitors.
AI Overviews

Adweek.com states “Google launched its artificial intelligence-powered search engine, Search Generative Experience, in beta last May, sending publishers scrambling to prepare for a significant disruption in organic search traffic, with potential declines ranging from 20% to 60%, according to media executives and search engine optimization experts interviewed for this story.” This highlights the significant potential decline in organic traffic that websites may experience due to AI Overviews.

About Google’s New AI Mode

AI Mode

Unlike AI Overviews, AI Mode applies to all search queries, offering broader AI-powered insights. With an interactive chat interface, users can refine their searches and ask follow-up questions—similar to ChatGPT and other AI chatbots. AI Mode is powered by a custom version of Gemini 2.0, Google’s latest AI model.

How We Stay Ahead of the Trends

As AI Overviews and AI Mode change the search landscape and reduce organic visibility, our team at Automotive Internet Media is committed to helping dealerships navigate these shifts. We focus on optimizing for long-tail queries by crafting detailed, authoritative content to improve visibility, enhancing local SEO by strengthening your Google Business Profile, and diversifying traffic sources by expanding your reach through social media and email marketing.

Recent Posts

Diving into Google’s New Ad Layout on Desktop Search Results

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You may (or may not) have noticed Google’s new update to desktop search results. When searching on Google recently – since February 19th to be exact – the Google ads on the right side have disappeared from desktop view.
Instead of three ads being shown at the top of the Google search with a few on the right side as well, there are now four ads being displayed at the top. Three more text ads will also show at the bottom of the search results pages (SERPs), removing about 30% of previously available ad space.
Google search
So, does these mean that CPCs will be increasing dramatically? Maybe, but we’ll need more time to evaluate. Of course, the top four ads will sell for a lot more than the bottom three, but that is to be expected. With less real estate available, demand will likely increase while supply has decreased, leading to an increase in selling/bidding price. However, one could also argue the fact that there are more “top” spots now than there were before, which could potentially lower the cost per clicks.
As a search marketing provider, we will continue to monitor this change’s effect on the CPC and average position of our clients’ ads, but as of now, little impact has been shown – although it’s early.
There is also another factor to consider: Organic traffic. Since there are now four top ads instead of three, the top organic search result will be pushed lower down the page (if there are four or more companies bidding on ads for that term).
What does this mean for you? Well, say you are winning a popular search term organically but not with paid (PPC) for your website. There are now four paid spots that may grab someone’s attention before they can even make it down the page to your organic listing.
Therefore, in a highly competitive market like auto sales, it may be time to consider purchasing your name if you are not already winning it, or to adjust your campaign structure to be a little more aggressive where needed. Organic rankings may become less important as time goes on, so we’ll have to keep an eye out!
For more information on pay per click search marketing and how it works, give AIM a call today!

Breaking Down the Difference: CarClicks vs. Traditional Pay Per Click Marketing

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You may be wondering if you have a CarClicks account, do you really need a pay per click presence, or vice versa? Or, do you even need either of these advertising mediums?
We recommend having both, and not because CarClicks is our product! The benefits will outweigh the costs, and you will sell more cars. It’s that simple. We’ll break down the two strategies so it’s easier to understand the differences, as it can get kind of confusing when you start hearing acronyms like PPC, CPC, SRP, and VDP. We’re confident you’ll see why each of these services will be worth it in the end.
How CarClicks Works
CarClicks is another version of a pay per click campaign where your ads are not listed on Google, but instead on various auto shopping websites for in-market customers. For example, you may have a used 2014 Ford Focus on your lot that you are looking to sell. Because CarClicks updates their database every day, they saw you have that Focus in your inventory, so they will automatically list the car on dozens of automotive websites where customers can shop for 2014 Ford Focus’ in their area.
carclicks
There are several benefits to this mode of advertising. First, you are not charged anything until a customer clicks on your car, so you know that whoever clicks is interested in that specific car on your lot. Second, when a customer clicks on your car, they will then be redirected to your website – specifically the vehicle display page, rather than staying on that third party site. The customer can then check out the car itself and browse any other cars on your site, fill out a contact form, etc.
Unlike Google’s pay per click campaigns, CarClicks ads are actual vehicle detail page listings, not just keywords that would link to either your website home page or search results page. The customer is taken directly to that exact vehicle, avoiding confusion and increasing the likelihood of them scheduling a test drive.
How Pay Per Click Marketing Works
Unlike CarClicks being linked directly to your VDPs, pay per click (PPC) ads are typically linked to corresponding search results pages or homepage of your website, depending on the ad. These ads are also not displayed on popular vehicle shopping sites, but are displayed right on the Google search page when you search a specific term, such as “2016 Chrysler 200” or “New 2016 Truck”.
pay per click
The PPC process uses a bidding system to determine which ad will show up for which keyword on Google, ranking in position – with 1 being the very first spot and also the most expensive per click. Recently, Google has gone away with side bar ads and is only filling ad spots for 1 through 7, so demand for ad space is at all all-time high.
Although Google PPC ads are similar in the sense that they are billed at a cost per click (CPC), they aren’t very similar in many other ways. These ads will show up based on the relevance, location, time of the day that a user searches for the keyword, budget, etc. An ad is not likely to show up in every search unless there are unlimited finds, of course. The more competitive a keyword, the more money it will cost an advertiser.  There is no fixed CPC here, and it’s a balancing act with trying to juggle funds and maintaining a good position in a Google search so that users will see the ad and click on it.
So, What’s the Verdict?
Pay per click search marketing can be time consuming, tricky, and tedious, so companies often outsource this service to experts like AIM. If your ads are not placed properly, relevant, or targeted in the correct way, you could be wasting thousands of dollars!
Customers are shopping online now more than ever before, so being absent from search marketing is a big no-no. We’re willing to bet that your competitors are paying for pay per click ads that are relevant to you, so don’t let them take your customers from you! Give us a call us today and let’s get started on your PPC strategy.
Additionally, if you are looking to drive customers straight to your vehicle display pages (and who isn’t?), schedule your 15-minute demo now! More views on your VDPs means more cars sold. Don’t lose out on a deal you could easily win.