Google Ads Engagement Rises as Efficiency Remains Stable: Optmyzr

The past year brought a steady stream of changes to Google Ads. From the rollout of AI Max and Demand Gen to evolving search behaviors, the platform’s performance data tells a nuanced story. A new Q1 2026 benchmark report from Optmyzr, analyzing over 21,000 accounts, provides clarity on how these shifts are impacting real-world campaigns.

At first glance, the numbers suggest stability. Engagement is climbing, costs are holding steady, and return on ad spend (ROAS) has barely budged. But beneath this calm surface, the data reveals a more significant narrative about where growth originates and how advertisers should adjust their strategies.

Engagement is rising, but it’s driven by broader reach, not just better efficiency. Over five quarters, click-through rates (CTR) jumped from 1.83% to 2.22%, a 21.31% year-over-year gain. Yet, this didn’t translate into better conversion rates or lower CPA. In fact, conversion rates dipped 0.96%, while CPA rose 4.41%. Impressions also fell roughly 11% year-over-year. Optmyzr summarizes this shift: “More clicks, from a smaller impression pool are converting at a marginally lower rate.” Fred Vallaeys, Co-Founder and CEO of Optmyzr, notes that as AI-driven changes reshape the SERP, fewer impressions may be available, but each carries more weight. This changes how advertisers should think about scaling.

Andrew Lolk, Founder of Savvy Revenue, adds a stark perspective: “All of Google Ads is a road to efficiency erosion. Any efficiency gain in any account running Smart Bidding leads to higher volume. Nobody gains efficiency and increases their ROAS target. We just chase higher volume.” The takeaway is clear: stronger engagement now comes from a wider mix of queries and user intent, not purely more efficient conversions. Advertisers are reaching users across more stages of the decision process, not just capturing high-intent clicks more effectively.

Mid-market accounts continue to outperform on ROAS efficiency. Budget size plays a key role. Advertisers spending between $10K and $50K per month achieved a 566% ROAS, roughly 50% higher than both SMB and enterprise segments. In contrast, enterprise accounts recorded the highest CPA at $16.00 and were the only segment where acquisition costs rose across all five quarters, with ROAS declining year-over-year. This doesn’t mean larger budgets perform worse. It shows how performance changes as accounts expand into broader coverage across queries and audiences. Growth comes less from the most efficient conversions and more from capturing additional demand beyond the core set.

Demand Gen growth reflects a shift in how conversions are captured. Campaign volume for Demand Gen surged 53.2% year-over-year, making it the fastest-growing format, while Video campaign volume dropped 31.6%. This decline isn’t about performance; it’s a migration from Video Action campaigns to Demand Gen. Joe Martinez, Co-Founder of Paid Media Pros, explains: “Video is still performing well for us, but the campaign type we hold valuable has changed. Our conversion-focused campaigns have shifted to Demand Gen because that’s where our performance is.” The underlying user behavior remains unchanged, but how it’s tracked across campaign types has evolved. What looks like declining performance in one format often reflects a redistribution of conversions across multiple campaign types as advertisers reach users on YouTube, Discover, and Search at different journey points.

Performance Max and Search show a familiar tradeoff. Performance Max campaign volume grew 15.7% year-over-year, with CTR improving from 1.29% to 1.68%. However, CPA increased and ROAS dipped slightly. This reflects a classic scaling tradeoff: as Performance Max extends reach across multiple surfaces, it introduces a broader mix of queries and user intent. More advertisers adopting the format also increases competition within that expanded inventory. Search remains the most stable campaign type, with a CTR of 12.15%, the highest engagement across all formats, and performance holding steady despite a slight volume decline. The relationship between these two types is increasingly interconnected. Performance Max often captures earlier or less-defined intent, while Search converts users with clearer intent later in the process. Growth now depends more on how these formats work together to engage users across multiple touchpoints.

E-commerce and lead gen show different paths to growth. Lead generation accounts saw modest efficiency gains, with ROAS rising from 248% to 267% even as CPA increased slightly, alongside nearly 20% growth in CTR. E-commerce accounts tell a different story. CTR rose 23.87% while CPC stayed flat, generating more traffic at the same cost. But conversion rates dropped nearly 5%, and ROAS dipped slightly. Kirk Williams, Founder of ZATO Marketing, explains: “Expanding into broader queries and placements brings in more traffic, but not all of it is ready to convert on the first interaction.” This doesn’t mean the traffic is less valuable. It indicates that more of the buying process now occurs across multiple touchpoints, with users returning through different campaigns before converting.

What this data means for advertisers. The report doesn’t suggest a decline in effectiveness, but it highlights a shift in where conversions come from. In many accounts, the same user is now reached multiple times across different campaigns. They might first see a product through Demand Gen, return via a Shopping ad, and then convert through Search. When that happens, conversions don’t always increase at the same rate as clicks. They get spread across more interactions, which can make performance look flatter than expected. Underneath the data, account performance isn’t getting worse. It’s a reflection of how people make decisions now. They take more time, do more research, and often need multiple interactions before converting. For advertisers, this means showing up in more places usually requires paying for some clicks that won’t convert immediately. But those interactions still play a role in getting the user to return and convert later. If you’re not there, you’re leaving those early interactions to competitors.

Where performance is heading next. The Optmyzr data reflects a platform where growth is changing how it appears in accounts. Engagement continues to rise, costs remain stable, and returns haven’t shifted dramatically. What’s changing is how advertisers capture results. More growth now comes from multiple campaign types working together, not a single campaign driving the conversion alone. Advertisers should evaluate performance less in isolation and more across how campaigns support each other. If conversion rates look flat or CPAs start to rise slightly, it’s worth examining how different campaigns contribute to the same conversion path, not just which one gets credit for the final click.