Google Ads CPC Jumps 15%, Crushing ROAS for Ecommerce Brands

Cost-per-click on Google Ads rose 15 percent year over year, hitting a 0.06-euro increase across all campaign types. Return on ad spend (ROAS) dropped more than 40 percent in the same period.

Those figures come from Channable's new eCommerce Google Ads Benchmark. The Dutch feed manager analyzed 1.38 billion euros in verified ad spend across 10,000 advertisers in European ecommerce. The data covers Google's Shopping and Performance Max campaigns from June 2025 to June 2026.

The ROAS decline varied by campaign type. Standard Shopping saw a 43 percent drop. Performance Max, Google's automated campaign format, fell 46 percent. Conversion rates on Performance Max slipped 0.11 percentage points. Brands are paying more and getting less back.

Stefan Hospes, co-founder and chief product officer at Channable, said the squeeze is not inevitable. "The brands feeling this most acutely treated Google Ads as a budget line when they should have approached it as key data infrastructure," he said. "A 15 percent CPC increase is painful if you are bidding on the same listings as last year. It is manageable if your feed is optimized, your budget is structured for Q4, and your product data is working as hard as your campaigns."

The benchmark suggests a widening gap between advertisers who optimize product feeds and those who do not. For online retailers, the 15 percent CPC increase directly lifts customer acquisition costs. Retailers with thin gross margins – low-ticket consumer goods and commoditized electronics – face the most immediate pressure. A higher cost per click, combined with lower conversion rates, can erase profitability on a single sale.

Brands with diversified acquisition channels have more room. Those with strong email lists and social-ad programs can absorb the hit. So can retailers investing in feed optimization and structured seasonal budgets. Hospes's comment points to a structural split: the gap between advertisers who treat Google Ads as a data system and those who treat it as a spending line is widening.

The seasonal data reinforces the challenge. CPC was 9.1 percent higher in the fourth quarter of 2025 than in the first quarter. Total ad spend jumped 47.9 percent from Q1 to Q4. The busiest period – Black Friday and the holidays – is also the most expensive. Brands that locked in budgets and optimized feeds before Q4 avoided a double hit. Those that did not faced higher costs and lower returns.

For traders tracking European ecommerce names, the benchmark offers a concrete metric. Ad spend efficiency – measured as ROAS or as customer acquisition cost relative to average order value – should appear in earnings reports over the next two quarters. Companies that report stable or improving ROAS despite the CPC rise likely have structural advantages. Those that flag rising ad costs without offsetting improvements are candidates for margin erosion. Google's auction model means rising CPCs reflect competition, not just platform pricing. As more retailers chase the same search terms, the cost of entry rises. The winners will convert a higher share of clicks into sales, not simply spend more.

Investors should watch these metrics alongside traditional stock market analysis to identify which ecommerce companies are managing ad cost inflation effectively.