Clicks up 11% but CPCs down 1%, first decline since 3Q2020

In its Digital Ads Benchmark Report Q1 2023 released today, NYC-based Tinuiti - which claims to be "the largest independent performance marketing firm" - reveals its finding that Google search ad cost-per-click (CPC) growth slowed for the 7th consecutive quarter in 1Q2023, and that in fact CPCs fell by 1% year-on-year, the first such decline since 3Q2020.

Also in 1Q2023:

• Total US Google ad spend grew 9% year-on-year, down from 10% growth in 4Q2022.
• Clicks grew 11% year-on-year, up from 3% growth in 4Q2022.
• However, CPCs continued to run significantly above pre-pandemic levels.
• After spiking to 14% in 2Q2021, Google search ad Average Order Value (AOV) grew by only 2% year-on-year, which may help explain why CPC growth has slowed over the same timeframe.
• Click share of Similar Audiences continued to fall, as it has since November 2022 when Google announced the sunset date of May 2023.

When asked what brands are thinking when they advertise on Google, Tinuiti Research Director Mark Ballard said:

"First and foremost, Google is the world’s largest search engine, and search remains one of the best-performing channels for direct response online. Couple that with the additional breadth Google offers in the display and video worlds along its targeting and measurement tools, Google is pivotal to reaching a large and cost-effective audience online."

Comment: Good to have confirmation from a large database that Google has so far been able to hold the line on CPC growth in the current inflationary economic climate.