Google search ad spending grew 11% year-over-year in the third quarter of 2024, demonstrating resilience despite slower price growth and the introduction of AI-based features, according to the latest Tinuiti Digital Ads Benchmark Report.

Overall performance.

• Google search ad spend grew 11% year-over-year in the third quarter of 2024, decelerating from 14% growth in the second quarter.
• Click growth remained stable at around 3% year-over-year.
• Cost per click (CPC) growth moderated to 8% year-on-year, compared to 12% in the second quarter.

Dynamics of Shopping ads.

• Shopping ad spend maintained strong growth of 16% year-over-year in the third quarter, matching performance in the second quarter.
• Click volume improved to 6% year-over-year growth, compared to 4% in the second quarter.
• Purchase CPC growth slowed to 9% year-over-year, continuing a downward trend.

Competitive landscape.

• Amazon dominates Shopping ad impressions with a 58% share in Q3, although down from 63% in Q2.
• Notable drop in mid-September to 45% share before a rapid recovery.
• Walmart is a distant second with a 22% share.
• Temu’s presence has decreased significantly compared to 2023.

Performance Max (PMax) Trends.

• 92% adoption rate among Shopping advertisers in Q3, up 1 point from Q2.
• Non-retail inventories reached 29% of PMax spending in September, up from 21% in June.
• YouTube only contributed 1% of PMax placement impressions.
• Mobile apps maintained a stable 10% share of impressions.

Campaign performance metrics.

• PMax conversion rates fell 2% compared to standard Shopping campaigns in Q3.
• PMax sales per click went from +3% to -3% compared to standard campaigns.
• Return on ad spend (ROAS) remained stable quarter over quarter.
• Spending on traditional text advertising increased 7% year-over-year, compared to 13% in the second quarter.

Impact of Google AI Previews.

• Unbranded mobile keywords saw a 14% decrease in CTR between April and July.
• CTR recovered in August and September across all segments.
• Non-brand mobile CTR remains 4% lower than April levels, but 6% higher than early 2023.
• Shopping ad CTR increased 14% on mobile between April and September.

Why we care. Data suggests that while Google’s AI insights initially impacted ad performance, advertisers are adapting and finding ways to maintain growth, including through Shopping ads and Performance Max campaigns.

Key takeaways.

• Shopping ads demonstrate resilience in the face of broader market changes.
• PMax adoption remains high despite a slight performance deterioration.
• Large retailers maintain dominant positions in Shopping ad impressions.
• The impact of Google AI Overviews appears to be stabilizing.
• Mobile remains a crucial battleground for advertising performance.

The report. Tinuiti Q3 2024 Digital Ads Benchmark Report.