Google Search Ad Revenue Surges as Amazon Retreats in Q3
▼ Summary
– Amazon’s exit from Google Shopping auctions in July 2025 created opportunities for other retailers, leading to increased clicks and reduced ad costs on Google and Microsoft.
– Google Search ad performance improved with a 10% year-over-year spend increase, 11% click growth, and a 1% decrease in cost-per-click (CPC).
– Shopping ads saw strong growth with a 15% rise in clicks, 14% increase in spend, and a 1% CPC drop, while Temu, Shein, and Walmart filled the gap left by Amazon.
– Google’s Performance Max campaigns grew significantly, accounting for 68% of shopping ad spend and delivering higher conversion rates and sales per click than standard Shopping campaigns.
– Microsoft search ads maintained steady growth with a 12% spending increase and 15% click rise, while Amazon continued its presence on Microsoft Shopping despite leaving Google.
The third quarter of 2025 witnessed a notable shift in the digital advertising landscape, with Google Search ad revenue surging as Amazon unexpectedly withdrew from Google Shopping auctions. This sudden move created fresh opportunities for other retailers, who rapidly expanded their presence, leading to stronger click growth and more favorable advertising costs across both Google and Microsoft platforms.
Marketing agency Tinuiti’s latest Digital Ads Benchmark Report highlights several important developments. Google Search experienced a significant uptick, with ad spend climbing 10% compared to the previous year. Clicks jumped 11%, marking the fifth consecutive quarter of accelerating growth. At the same time, cost-per-click metrics declined by 1%, reversing an earlier increase from the second quarter.
Shopping ads demonstrated particularly strong performance, with clicks rising 15% and overall spend increasing by 14%, while CPCs dipped 1%. The departure of Amazon created room for other key players: Temu and Shein resumed their Google Shopping activities around mid-2025, and Walmart successfully captured greater visibility within the platform.
Performance Max campaigns gained substantial momentum, accounting for 68% of all shopping ad expenditure in the third quarter, up from 59% just one quarter earlier. These automated campaigns delivered conversion rates 2% higher and generated 5% more sales per click compared to standard Shopping campaigns. However, return on ad spend was slightly lower, by 2%, due to elevated cost-per-click rates. A notable 33% of Performance Max spending went to non-shopping placements, with YouTube video impressions doubling from 5% to 9%.
Text ads on Google also regained traction, showing an 8% year-over-year increase in spending and a return to positive click volume after several slower quarters. Brand-related CPC growth cooled considerably, dropping from 19% in the first quarter to just 5% in the third, while non-brand CPCs fell by 7%. Advertisers have begun testing new AI Max campaigns, though these currently represent only a small portion of overall activity.
Microsoft’s search advertising platform maintained steady growth, with ad spending up 12% year-over-year and click growth just below 15%, accompanied by a 2% decrease in CPCs. Interestingly, Amazon continued its participation in Microsoft Shopping ads even as it paused its Google program.
Amazon’s strategic withdrawal created a vacuum that ultimately benefited competing retailers and provided Google with an opportunity to stabilize both pricing and auction dynamics. This rapid shift underscores how quickly competitive conditions can change within digital advertising. The expanding role of Google’s Performance Max indicates that automation and AI-driven campaign management are becoming essential tools for maintaining efficiency and reach in an increasingly platform-driven marketplace.
The overall picture shows Google’s paid search ecosystem adapting effectively to Amazon’s absence, delivering higher volumes at reduced costs. Performance Max continues to transform the advertising landscape as more advertisers embrace automated optimization and AI-powered tools to enhance their marketing outcomes.
(Source: Search Engine Land)
