Rising CPCs aren’t just the result of more competition inside search auctions. They’re increasingly the result of what happens before anyone places a bid.
AI Overviews, shrinking organic click volume, and stronger brands competing for a smaller pool of commercial traffic have changed the economics of paid search. Improving bids and ad copy still matter, but the biggest opportunities now sit outside the auction itself.
Why paid search keeps getting more expensive
Paid search costs are climbing across almost every category. The cross-industry average CPC is $5.42, per the latest WordStream benchmarks, more than double what it was a decade ago.Â
Stackmatix has Google Search up 14-18% year over year. LinkedIn is up 18 to 22%. Some accounts are seeing 25% inflation in their primary commercial keywords.
For most of the last decade, organic search helped offset PPC costs. Today, AI Overviews absorb the clicks that used to keep your paid search efficient.Â
The latest zero-click study from Sparktoro shows an 8% reduction in clicks through from search engines vs. 2025, further impacting brands whose users now get information from AI summaries.Â
Digiday’s research with brand and agency professionals shows 37% of respondents have already seen informational search traffic decline, which mirrors what we’re seeing across our client base, putting more pressure on navigational and transactional traffic to hold steady.
The number of advertisers participating in search auctions has risen 35% year over year because AI creative tools have lowered the barrier to entry for new bidders. In its first year, AI Max for Search has expanded query space for advertisers willing to use it, but also concentrated competition into a narrower set of commercial queries.
Fewer organic clicks reaching your site means more pressure to make up the gap in paid auctions. More advertisers fighting for those auctions means higher CPCs. And the auctions that still resolve to a click are increasingly the only ones where a user has exited the AI summary and chosen to scroll past it.
Dig deeper: The authority era: How AI is reshaping what ranks in search
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3 levers that matter more than the auction
Paid search performance in 2026 is decided across three layers. The auction itself now offers the least opportunity to improve results.
1. Brand: Upstream of the click
This layer determines whether a click is generated or absorbed before any auction begins. It’s influenced by authority signals, brand mentions, AI Overview inclusion, LLM citations, and visibility in the publications and communities AI systems use to build…
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