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Advertising efficiency is strongly improving overall, primarily driven by Shopping campaigns which achieved roughly 30% YoY conversion growth in Q1 and Q4 while cost increases remained under 4%. However, Performance Max efficiency declined in Q4 as conversions dropped despite rising costs. Across channels, mobile devices consistently dominate both conversions and costs, especially for Shopping and Performance Max.
The 365-day trajectory reveals a tight correlation between Cost and Conversions, suggesting a stable baseline ROI. Efficiency aligns perfectly during the massive Q4 holiday spikes (late November/early December) and the subsequent Q1 post-holiday contraction. However, late summer shows a slight divergence where costs creep up faster than conversions, hinting at seasonal CPC inflation and tightening margins.
Year-over-year data shatters the illusion of uniform efficiency, revealing a major shift in channel performance:
Mobile is the definitive engine for cost-effective acquisition. Across PMax and Shopping, mobile drives roughly 75-80% of conversions but consumes only ~65% of the cost. This stark disparity highlights that mobile CPAs are significantly cheaper than desktop. Seamless mobile checkout experiences and algorithmic bias toward mobile-first intent are driving this efficiency gap.
The data reflects a broader industry correction. As Google’s automated bidding (PMax) matures, rising CPCs and opaque placements are forcing advertisers to pivot back to high-intent, controllable channels (Standard Shopping). Concurrently, inflation-weary consumers are relying heavily on Shopping ad price comparisons on mobile devices before converting.
