Digital advertising is more competitive than ever and it is about to become even more challenging. Google Ads cost-per-clicks (CPCs) are up 47% in just the last five years. AI-driven ad tools like Performance Max (PMax) and Advantage Plus are removing some of the control that marketers once had and are increasing the cost of advertising for less sophisticated media buyers. Google is rolling out ads inside its AI overviews, and OpenAI is considering rolling out ads inside ChatGPT. The potential shift of TikTok ad spend, if TikTok is banned, and the impact of Google losing market share to AI tools are shaping the next twelve months to be a tough year for all but the very best advertisers.
47%Google Ads CPCs have increased in the last five years
The Enduring Power of Advertising Fundamentals
The first piece of advice from top-performing PPC teams is to never forget the fundamentals. No matter the platform or the impact of AI, advertising remains about delivering the right message to the right audience through the right content. Those who excel at the fundamentals will continue to win. Understanding what is working well in any given industry is essential. Tools like SEMrush’s Advertiser Toolkit provide insights into all the ads competitors are running, how their spend is changing, and the landing pages they use.
SEMrush and similar tools offer visibility into:
| Feature | Benefit |
|---|---|
| View all competitor ads | See creative, messaging, and spend trends |
| Track spend over time | Spot seasonal or strategic shifts |
| Analyze landing pages | Learn what they drive traffic to |
| Video and social ad insights | Understand cross-channel strategies |
Insight
The winners in digital advertising are more public than ever. Everyone can see which ads, messages, and creative approaches are succeeding, which continually raises the bar for all advertisers.
The winners in digital advertising are more public than ever. Everyone can see which ads, messages, and creative approaches are succeeding, which continually raises the bar for all advertisers.
AI-Driven Smart Bidding and Campaign Types
AI is having a big impact on digital advertising through smart bidding strategies. Tools like Google's Performance Max and Meta’s Advantage Plus are reshaping ad management. Performance Max now accounts for 51% of Google ad spend, and Advantage Plus consistently produces higher returns than standard campaigns.
Critics argue these formats take away too much control and reduce transparency, but these tools work if advertisers know how to use them and retain control over strategic inputs.
The direction of ad platforms is clear: advertisers must figure out how to use these tools to generate the best return on ad spend. Although algorithms are black boxes, crucial leverage remains in selecting the right channels, crafting strong messaging, and targeting the right audiences.
Channel and Messaging Control
Advertisers still make strategic choices. For example, Octopus Energy in the UK has shifted spend from social to display. Marketers control ad messaging and targeting. For example, monday.com focuses paid search on branded competitor terms such as Slack and Trello, sometimes bidding on expensive and highly navigational keywords. Regardless of AI involvement, the fundamentals remain: the right message for the right audience in the right content.
Example
monday.com’s search ads target branded competitor terms, but if the messaging does not speak to user intent or leverage unique benefits, results may suffer, regardless of bidding strategy.
monday.com’s search ads target branded competitor terms, but if the messaging does not speak to user intent or leverage unique benefits, results may suffer, regardless of bidding strategy.
Campaigns must be evaluated on content quality, not just algorithm selection. No AI tool can compensate for irrelevant or uninspiring creative.
The Importance of Creative Excellence
Social media ad creative quality is more important than ever. For example, PlayStation’s ad creative features in-game footage and targeted campaigns that resonate with nostalgic buyers, while some advertisers, such as Scottish Power, promote creative that lacks clarity or appeal. As AI tools make mass production of ad creative easier, the risk of low-quality, generic ads increases. Marketers must use AI tools, like SEMrush’s AdCreative.AI, to produce high-quality, brand-aligned creative, not just mass-generated content.
Leveraging Data and Customer Insights
Platforms such as Google and Meta have vast user data, but advertisers can achieve better results by providing their own customer lists. While platforms can profile potential buyers, only advertisers know which customers are highly engaged and likely to convert. Sharing this data can yield more qualified traffic.
1,000%Example of return on ad spend achieved by seasoned PPC teams vs.
24% ROAS from previous agency
24% ROAS from previous agency
Lead Generation and Platform Innovations
Meta’s lead generation ad offerings are delivering strong results in industries such as professional services, financial education, healthcare, automotive, travel, and B2B SaaS. Meta continues to innovate with AI and automation features, conversational AI, social commerce, in-app purchases, and live shopping. These tools help advertisers reach and convert audiences more efficiently.
Measurement and Attribution in a Complex World
Accurate measurement is essential in digital advertising. The user journey often includes multiple touchpoints, making attribution complex. Google has shifted its default attribution model from last-click to data-driven attribution, giving more value to upper-funnel activities. Google’s media mix modeling tool, Meridian, provides deeper insights for those with diverse channels and higher budgets. Advertisers must prioritize tracking and analytics to understand which campaigns are driving results and to make sensible budget decisions.
| Attribution Model | Description |
|---|---|
| Last Click | Credits the last touchpoint before conversion |
| Data Driven | Distributes credit across multiple touchpoints based on impact |
Key Point
Too many advertisers still lack proper data on what is working in their digital marketing, which limits their ability to make informed decisions.
Too many advertisers still lack proper data on what is working in their digital marketing, which limits their ability to make informed decisions.
From Traffic to Conversion
After generating traffic, the next focus is converting visitors into customers or leads. Improving landing page performance is one of the highest-leverage activities in digital marketing. Ensuring that landing pages are optimized will turn more paid visitors into sales, maximizing the value of every advertising dollar spent