The number of clicks grew by a modest 3%, while the cost per click (CPC) slowed to 8%. Spending on Google Shopping increased by 16%. In general, advertising strategies remain stable, although the introduction of AI makes its own adjustments.
These findings are confirmed by the Tinuiti Digital Ads Benchmark report, based on non-personalized data on US ad campaigns managed by Tinuiti. The annual volume of digital marketing spending here exceeds $4 billion. Let’s analyze the performance of each type of advertising.
Search advertising
- Google Search ad spending grew by 11% year-on-year, but the growth rate slowed down from 14% in the second quarter.
- The average cost per click (CPC) also grew more slowly, decreasing from 12% in the second quarter to 8% in the third quarter.
Google Shopping campaigns
- Spending on Google Shopping increased by 16% compared to the same period last year.
- Completion rate increased by 6%, exceeding the previous rate of 4% in the second quarter.
- CPC for Shopping campaigns slowed to 9%.
Performance Max (PMax)
- Performance Max campaigns usage among advertisers running ads on Google Shopping reached 92%, which is higher than the 75% for Smart Shopping in mid-2022.
- Conversion rates for PMax fell by 2% compared to regular Shopping campaigns, and sales per click decreased by 3%.
- The share of non-Shopping PMax campaigns among retail advertisers increased to 29% at the end of the third quarter, up from 21% in June 2024.
- YouTube accounted for only 1% of PMax impressions, while mobile apps held a stable share of impressions at 10%.
Textual advertising
- Google’s text ad spend grew 7% year-over-year, down from 13% growth in the second quarter.
- The main reason for the increase in spending was an increase in CPC, as the number of clicks increased slightly.
- Amazon reduced its share of impressions in Google’s text advertising auctions in the third quarter, which somewhat reduced competition in this segment.
Video advertising and Display Network
- The growth of video advertising spending on YouTube slowed to 11%.
- Spending on YouTube on TV screens increased by 24% year-on-year.
- CPM on Google Display Network increased by 11%, although the total number of impressions decreased by 1%.
Impact of Google AI Overviews on advertising
- The launch of Google AI Overviews in May 2024 has led to a decrease in click-through rates (CTR) in some segments of text ads, especially for unbranded keywords on mobile devices.
- The decrease in CTR from April to July was 14%, but by September the indicator began to recover, remaining 4% below the April level.
Conclusion
The third quarter of 2024 showed a certain slowdown in the growth of costs and CPC in different segments of Google’s advertising campaigns, which may indicate stabilization after the previous growth rates. The use of innovations such as Performance Max and AI Overviews, while providing additional opportunities for optimization, also create certain challenges, such as a decrease in CTR on mobile devices. In general, advertisers need to continue to adapt to market changes, choosing the best formats and channels to achieve their goals.
