Google Ads costs are climbing at an alarming 2.33% annually since 2019, hitting advertisers where it hurts—their wallets. The average cost-per-click now sits at $1.63, with some industries like legal services getting slammed with CPCs of $6.75. A perfect storm of fierce competition, AI-driven bidding wars, and privacy regulations has created an expensive digital arms race. The deeper story behind these soaring costs reveals an unsustainable trend for many businesses.

While businesses continue pouring money into Google Ads, the platform’s costs are hitting new heights in 2025. The average Cost-Per-Click (CPC) now sits at $1.63, and it’s not showing any signs of slowing down. Small businesses are shelling out between $1,000 and $3,000 monthly, while their medium-sized counterparts are dropping a whopping $7,000 to $30,000. Talk about expensive clicks.

The culprits behind these soaring costs? Well, there’s quite a lineup. Industry competition is fierce, with some sectors seeing cutthroat bidding wars. Seasonal events like Black Friday turn the platform into a digital battlefield, sending CPCs through the roof. And let’s not forget Google’s AI-driven bidding algorithms, which are supposedly “optimizing” everything – right into everyone’s wallets. Legal services face particularly steep costs with average CPCs of $6.75 on the Search Network. Advertisers targeting peak business hours often face higher costs due to increased competition from B2B searches.

Competition, seasonal bidding wars, and AI algorithms are pushing Google Ads costs higher, turning digital advertising into an expensive arms race.

The numbers tell a brutal story. With a 2.33% annual CPC increase since 2019, advertisers are getting less bang for their buck each year. Some industries are facing even steeper climbs, with compound annual growth rates exceeding 4%.

Remember when $100 could buy a decent chunk of clicks? Those days are long gone.

Privacy regulations aren’t helping either. As cookie tracking crumbles and targeting options shrink, advertisers are fighting over an increasingly limited pool of users. The result? Higher costs, of course. Economic conditions play their part too – during boom times, everyone jumps into the advertising pool, driving up prices like a digital real estate bubble.

The automation revolution isn’t exactly providing relief. Google’s Smart Bidding might be “smart,” but it’s also driving up competition for valuable clicks. Cost per thousand impressions (CPM) can reach a jaw-dropping $78.64 on the Search Network.

Meanwhile, businesses are stuck in a cycle of increasing budgets just to maintain their click volume. It’s a simple equation: rising CPCs plus fixed budgets equals fewer clicks. Welcome to the new normal of digital advertising, where the only constant is that costs keep climbing.