The digital advertising market is experiencing a distinct cooling trend with decelerating cost inflation. Although absolute CPCs drifted upward over the past year, year-over-year growth rates steadily declined across all channels. Notably, Shopping CPC growth dropped from a peak of 16 percent to roughly 6 percent, signaling a stabilizing, less aggressively competitive landscape as cost increases moderate.
The 365-day trajectory illustrates a fiercely competitive but shifting e-commerce landscape. While initial assumptions might predict perpetual, uniform CPC inflation, the line chart reveals distinct channel volatility. Performance Max (PMax) and Standard Shopping exhibit expected Q4 (Nov/Dec 2025) peaks driven by holiday retail demand, followed by sharp January troughs. Conversely, Search challenges seasonal assumptions by remaining flat through Q4, only to surge steadily from February to June 2026. This indicates a strategic advertiser pivot toward high-intent, evergreen queries once the holiday rush subsides.
The YoY quarterly bar charts complicate the short-term momentum seen in the line chart. Although absolute CPCs for Search and Shopping climb steadily in H1 2026, YoY inflation is actively decelerating across all channels. Shopping YoY growth drops from 16% (Q3 2025) to 6% (Q2 2026), and Search cools to 0% YoY growth by 2026. This contradiction suggests that while month-over-month competition remains active, the annual rate of cost expansion has hit a ceiling, likely due to macroeconomic tightening and advertisers enforcing strict ROAS caps.