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The digital advertising market is cooling down after an inflationary start to the year. While absolute Search CPCs climbed steadily, overall year-over-year inflation decelerated sharply. Shopping CPCs initially spiked 11% in Q1 but stabilized alongside Performance Max and Search to a mere 1% to 3% growth by Q4, signaling a stabilizing, less aggressively competitive landscape.
Macro-Trend Analysis: CPC Dynamics (Oct 2025 – Oct 2026)
The 365-day trajectory initially suggests a fiercely competitive e-commerce landscape, with Search maintaining the highest absolute CPCs (€0.40–€0.45+). However, the pronounced post-holiday trough in January 2026 across all channels, followed by a prolonged mid-year plateau for Performance Max (PMax), challenges the assumption of unchecked hyper-inflation. Instead, the data reveals a highly cyclical market where advertisers aggressively pull back post-Q4 before ramping up for mid-year (June) promotions.
The quarterly YoY bar charts critically complicate the short-term momentum seen in the line chart. While absolute CPCs peaked in mid-2026, YoY inflation is rapidly decelerating for product-feed campaigns.
These shifts are heavily influenced by external market forces and Google’s platform mechanics:
The divergence between channels highlights a strategic shift in advertiser behavior. The massive early-2026 YoY inflation in Standard Shopping suggests a temporary squeeze on legacy placements before budgets likely migrated to automated solutions. Meanwhile, the steady absolute climb and accelerating YoY growth of Search CPCs prove that despite Google’s aggressive push toward black-box, multi-channel solutions (PMax), advertisers continue to fiercely defend bottom-funnel, text-based real estate. In an uncertain economy, advertisers are willing to absorb higher CPCs for the guaranteed high-intent traffic that pure Search provides, leaving PMax to absorb broader, lower-CPC algorithmic discovery traffic.
