Why are Google Ads more expensive in 2025? (And what to do next)

In 2025, it’s not just your egg prices rising, but the cost of your Google Ads too.

“But how does this make any sense? I haven’t changed my budget since last year”

You may have noticed that your CPC is increasing while the number of clicks is decreasing, leaving you with less bang for your buck. It’s no surprise marketers everywhere are asking: “how much do Google Ads cost in 2025?” Whether you’re running lead generation or e-commerce campaigns, the cost to reach your audience has risen, but are you getting the returns to match?

Well, luckily my friend, you’re not alone; many companies, brands, and advertisers are feeling the pinch and we’re here to help.

It’s not all doom and gloom and while prices are rising, there will always be penny-pinching ways to make sure that your spend is as efficient as possible.

In this first of a four-part series (on how to manage rising Google Ads costs), we’ll be looking at why costs are rising in the first place, and the many factors that cause rising ad costs. 

We’ll also touch on how a digital marketing audit from a PPC agency could be the solution that you’re looking for, as an outside perspective could be the difference between continuing to burn a hole in your company’s wallet and meaningful results.

Let’s dive straight in.

So, why are Google Ads costs rising in 2025?

“He’s gaining on us” — every marketer watching their CPC creeping up on them like T-1000 from Terminator 2. Hopefully, only a few tears are shed, not any blood…

So, why are costs rising at an average CPC across all Google Ads campaigns by 12.9% year-on-year (WordStream)?

Inflation

Yep, it’s not just your weekly Tesco shop that’s gone up (thanks for nothing, Clubcard), the cost of running Google Ads has followed suit. In 2025, nothing is safe… not even your PPC budget.

As Prince says, it’s a “Sign O’ the Times”.

While the UK’s inflation rate may be slowing, as of June 2025, it’s still sitting at 3.6%, well above the Bank of England’s 2% target (Office for National Statistics). And although inflation doesn’t directly raise your CPCs by the same percentage, it does impact the wider marketing landscape.

Fewer customers in the market (thanks to tightened purse-strings) means more brands are fighting harder to convert them. That usually results in higher competition, more aggressive bidding, and a performance chart that (if your budget hasn’t kept pace) looks more depressing than a plate of unseasoned chicken and boiled vegetables.

So no, it’s not as simple as “4% inflation = 4% higher CPCs”, but if you’re still running the same monthly ad spend as you were last year, chances are you’re now getting fewer clicks, higher CPAs, and a shakier ROAS.

But while inflation’s definitely part of the problem, it’s not the only thing nudging your CPCs upwards. The good news? Some of the other culprits are a little more in your control.

Competition is Fierce

I hope you brought your boxing gloves, because you’ll need to set your alarm to “Eye of the Tiger” to stand tall above the competition.

More and more brands are shifting their marketing budgets online, with many businesses ditching traditional media entirely for the higher returns and precision of online marketing, meaning that the PPC landscape has become more competitive than ever.

With 87% of industries seeing CPC increases, and some spiking over 40% year-on-year (WordStream), the auction is hotter than ever. And when you’re competing against bigger budgets or brands with aggressive smart bidding strategies, it’s easy to get priced out.

For in-house marketing managers, this means your return on ad spend can quickly dwindle if you’re not careful. To counter this make sure to regularly: review your location targeting, layer in audience segments, and lean into data to ensure every pound of ad spend is fighting smart, not just hard.

Automation, Man’s New Best Friend? Or Fiend?

For decades, humans have been dreaming of having robots to do their menial tasks, so when automated features are added to our Google Ads account, we’re over the moon. They’re not only useful, they also save us tons of time so that we can focus on more urgent tasks.

Google’s Smart Bidding and automation tools are extremely helpful, however they need skilful and pro-active management to ensure their activity aligns with your business goals.

Not all automated bidding strategies are created equal, some can get a little bit trigger-happy. Strategies like Maximise Conversions or Target Impression Share aim to hit your goals at any cost, meaning that they may bid more aggressively than a human would. Instead of gradually increasing bids like a savvy marketer might, AI will go straight from 0-100, because why waste time, right?

In theory, this will help you get more conversions. So, why are you complaining?

Well, in practice, it can leave your budget looking drier and sparser than the Sahara. Automation might help you hit your goals, but it can do so at the expense of your CPA or ROAS.

Worse still, it can contribute to market-wide CPC inflation. Once your competitors catch on and fire up their own aggressive Smart Bidding strategies, everyone’s costs start climbing.

“How much for a click?”

“One-million dollars”

Moral of the story: always test your bidding strategy. Just because the robots are at the wheel doesn’t mean you can nap in the back seat.

How can a Digital Marketing Audit help manage rising Google Adword costs?

When your Google Ads costs are creeping up faster than your overdraft limit, it’s tempting to go full panic mode and start slashing budgets.

But often, the real solution isn’t spending less; it’s spending smarter.

That’s where a digital marketing audit comes in. A professional audit isn’t just about ticking boxes, it’s a top-to-bottom investigation into your Google Ads account of what’s working, what’s truly going wrong, and the steps you can take to deliver the greatest return on investment.

At Repeat Digital, we’re a performance-driven PPC agency who live and breathe Paid Search and PPC (so that you don’t have to).

Our free audit isn’t some generic PDF document churned out of ChatGPT. Each of our audits is bespoke, written by professionals that care about getting the best results for your business.

“How will this help my business?” I’m glad you asked:

Identify Waste

Cut spend on irrelevant clicks and keywords that aren’t converting.

Refine Targeting

Focus your budget on the audiences and locations that actually drive results.

A Clear Action Plan

Not just a few tips, but a detailed breakdown of what’s not working, what to fix, and how to boost your conversions across the board. Even small changes to your Google Ads account structure can have a big impact on performance.

And the best part? It’s completely free, no strings attached, no pressure. Just honest insights from real PPC experts. Our clients love how in-depth our audits go, and the results they see afterward speak for themselves.

Sign up here today to get in contact with us.