Google Ads Generating Fewer Clicks? Why?

The folks at PPC Hero noted that Google Ads CPCs increasing and there is a decline in ad click volumes within Google Search. The question is why? More competition? Higher CPC prices? New bidding strategies? AI Overviews causing a drop in ad clicks?

Sundar Pichai, Google's CEO, told us that search ads with AI Overviews on the page are at baseline to the same ads without AI Overviews on the page.

So why are we seeing a decline in clicks on Google Ads? "It’s not just about demand, the supply of clicks has been under pressure too," Mark Sansum on PPC Hero wrote. "There are signs that people are clicking on fewer search ads than before, which effectively reduces the available inventory of clicks," he added. He explained:

The rise of rich search results and answers (like Google’s generative AI results) can satisfy users’ queries without additional clicks.

The Google Ads system faces classic supply and demand pressure: when ad supply (clicks) tightens and demand (advertiser spend) keeps growing, CPC prices are forced upward.

You might be thinking “why would Google want to reduce clicks”, well, with rising revenue year over year and click costs increasing, it’s a pretty good picture for Google whilst they roll out AI snippets, AI mode, etc.

I asked some PPCers what they think and here is what I heard:

Greg Finn wrote on X:

Yes, CPCs are rising so clicks are falling unless the budget rises as well.

Of course clicks alone is a meaningless metric that you could skew any way that you want.

The smart bidding push was a great move for Google.

I asked Greg, what about AI Overviews and he replied, "a part maybe, but smart bidding #1"

Drew Cannon responded:

AIOs are cannibalizing high intent keywords. And Google seems to be using smart bidding to ensure revenue goals are still met.

But as Greg explained, "Yeah, it is just so hard with Google hiding all AI data to prove."

Anthony Higman wrote on X:

Also seeing declines but on pure search tighter match type campaigns.

I DO think its related to AI overviews but more so on how they are altering pages when Ai overviews are present and how that changes user behavior.

Could also be related to Liz's " only show ads when we think they are relevant" thing.

There are some searches we just dont see ads at all or we see them and then on the next search for the same keyword there are no ads. Its interesting, a lot changing recently.

Yes this too, but I’d have smart bidding above it

— Greg Finn (@gregfinn) July 8, 2025

What do you think?

Hat tip to Glenn Gabe for highlighting this:

Declining clicks is not just an organic problem, it's impacting ads as well -> Why are Google Ads CPCs increasing?

Mark covers several of the potential issues leading to this and covers declining ad click volume as part of that:

"Declining Ad Click Volume (Lower Supply). It’s… pic.twitter.com/2ALUTpu9Dq

— Glenn Gabe (@glenngabe) July 8, 2025

Forum discussion at X.