The PPC Pulse: July 2025 - dwightnickolai

July 2025 will be remembered not for incremental updates, but for foundational, market-altering shifts. The month was defined by a strategic duel between tech titans that reshaped the e-commerce landscape overnight, sending immediate and lasting shockwaves through the paid media world. Simultaneously, the relentless march of artificial intelligence continued its paradoxical journey; it offered advertisers unprecedented new insights into campaign performance while systematically removing the manual controls they once relied on to act. Underpinning all of this is a stark economic reality: the cost of engaging with customers is soaring across every major platform, forcing a new level of strategic discipline and a ruthless focus on efficiency.

Amazon Abandons Google Shopping

The Event: A Digital Vanishing Act

In a stunning move executed with surgical precision, Amazon completely halted all advertising on Google Shopping across its major global markets. This digital vanishing act was not a gradual pullback but an abrupt cessation of activity, executed over a mere 48-hour period between July 21 and 23, 2025. The retail behemoth, which previously commanded a dominant impression share of approximately 60% in Google Shopping auctions, saw its presence plummet to zero in key markets including the U.S., U.K., and Germany. The event sent immediate shockwaves through the digital advertising industry, sparking intense speculation and forcing a critical re-evaluation of paid search strategies for nearly every e-commerce brand.

Market Impact Analysis: The Ripple Effects

The immediate aftermath of Amazon’s withdrawal created a complex and fragmented auction environment. The impact on advertisers was not uniform, leading to both challenges and opportunities depending on their size and market position.

Counter-Intuitive Cost Increases: While many advertisers logically expected cost-per-click (CPC) rates to fall with a major competitor exiting the auction, the opposite often occurred. The vast inventory of ad space vacated by Amazon was rapidly absorbed by other retail giants like Walmart, Target, and Home Depot. These players aggressively increased their spending to capture the newly available market share, which in turn intensified auction competition and, in many cases, drove CPCs higher.
Short-Term Relief for Some: Despite the increased competition from large retailers, some mid-to-large-scale e-commerce businesses did observe an immediate, albeit likely temporary, drop in benchmark CPCs. Reports indicated a decrease of 5% to 12% within 72 hours of the pullback, providing a brief window of cost relief and easing margin pressure for this segment.
A Golden Opportunity for Smaller Brands: For smaller e-commerce brands and direct-to-consumer (DTC) players long overshadowed by Amazon’s dominance, the withdrawal created a significant window of opportunity. With Amazon’s massive budget removed from the equation, these smaller businesses stand to gain from greater visibility and potentially cheaper clicks, democratizing access to high-intent shoppers actively searching for products.

Deconstructing Amazon’s Power Play

This was not a simple cost-cutting measure or a temporary test. A deeper analysis suggests a multi-layered strategic decision rooted in bolstering Amazon’s own immensely profitable advertising ecosystem and positioning itself for the next era of search.

Fortifying the Retail Media Moat: The most direct driver is likely Amazon’s strategy to redirect its massive ad budget toward its own internal ad platforms. Retail Media Networks (RMNs), such as the one operated by Amazon, are the fastest-growing and most resilient segment of digital advertising, demonstrating stable costs and soaring performance even in uncertain economic times. By compelling brands to engage on its own turf, Amazon internalises ad spend, enhances the value of its powerful first-party data, and strengthens its “secondary moat” against competitors.
A Pre-emptive Strike in the AI Search War: This move is widely interpreted as a strategic chess move against Google’s increasing integration of AI into its search results, particularly AI Overviews and AI Mode. As Google moves to control more of the user journey within its own AI-powered funnels—often answering queries directly on the results page—the value of a click-through to an external site diminishes. By pulling back, Amazon is creating its own walled garden centred around its own AI shopping assistant, Rufus, thereby maintaining direct customer acquisition and full-funnel control. This reflects a broader industry trend where major players are recognising that the value of a Google referral may be declining. The “Great Decoupling” of search visibility from actual website traffic is a documented phenomenon, with AI summaries being a primary cause. Amazon, a deeply data-driven company, likely calculated that the return on investment from Google Shopping clicks is set to decline sharply and made a strategic decision to exit a channel with diminishing returns in favour of its wholly-owned, higher-margin internal advertising ecosystem.
A Hardball Negotiation Tactic: A third, highly plausible theory is that Amazon is leveraging its status as one of Google’s largest advertisers to pressure Google for more favourable terms or reduced fees. It is a high-stakes negotiation tactic between two of the world’s most powerful tech companies, with millions in ad spend as the bargaining chip.

Navigating the New E-commerce Battlefield

The strategic landscape for e-commerce advertising has been redrawn. Brands must adapt quickly to this new reality.

Immediate Strategy Audit: All brands, especially those in the e-commerce sector, must immediately audit their Google Shopping strategies. Analyse changes in impression share, CPCs, click-through rates, and competitor visibility that have occurred since late July.
Capitalize on the Void: Aggressively test increased budgets on Google Shopping to determine if you can efficiently capture the market share Amazon has vacated. Monitor performance meticulously to see if you can acquire new customers at a profitable cost per acquisition.
Diversify into Amazon Ads: The message from Amazon is unequivocal: a significant portion of your advertising budget should now be allocated to its own ad ecosystem. This is no longer optional for brands that sell on the platform. Focus on Sponsored Products and Sponsored Brands, and begin exploring the rapidly growing Amazon Demand-Side Platform (DSP), which now accounts for over 20% of total Amazon ad investment for many advertisers.
Rethink Your Entire Channel Mix: This event underscores the critical need for robust channel diversification. Over-reliance on any single platform is a significant risk. This is the moment to accelerate investments in other RMNs (such as Walmart Connect and Target’s Roundel), social commerce platforms (like TikTok Shop), and other emerging channels to build a more resilient customer acquisition strategy.

Gaining Insight While Ceding Control

July also highlighted the central paradox of AI’s role in modern PPC. Across all major platforms, the trend is clear: advertisers are being given more granular reporting on the performance of automated campaigns while simultaneously having the manual levers they once used to act on those insights systematically removed. This marks a fundamental shift in the role of the PPC practitioner.

Google’s New Transparency: Peeking Inside the Black Box

For years, advertisers have been hesitant to fully embrace Google’s most automated campaign types, like Performance Max (PMax), due to their “black box” nature. In July, Google took significant steps to address these concerns by rolling out a wave of long-requested transparency features.

AI Max & Performance Max Upgrades:
- Audience & Creative Segmentation (AI Max): A game-changing update for large-scale brands, advertisers can now see detailed reporting that breaks down which audience signals and creative combinations are driving conversions within AI Max campaigns. This allows for performance analysis by product line, region, audience persona, or creative variant, moving AI Max away from being a single, opaque outcome.
- Search Term & Landing Page Report (AI Max): A new report now explicitly links the search terms that triggered AI Max ads to the specific landing pages Google’s automation sent the traffic to. This allows advertisers to finally validate that high-converting queries are landing in the right place and to spot and fix poor matches that waste budget.
- Negative Keyword Lists (PMax): In a hugely welcome update, advertisers can now add negative keyword lists directly to PMax campaigns. This provides a crucial lever to control wasted spend, filter out irrelevant traffic, and improve overall campaign quality.
- Device-Level Targeting (PMax): The ability to control device targeting—choosing to serve ads on computers, mobile phones, tablets, or TV screens—has been rolled out to PMax campaigns, giving advertisers back a fundamental control lever they had been missing.
- Search Term Categories (RSAs): To provide more transparency for Responsive Search Ads, Google began testing “Search Term Categories.” This feature groups user searches by intent and, importantly, reveals some of the search terms that were previously hidden for privacy reasons, giving advertisers a clearer picture of what queries their ads are matching against.

Meta’s Automated Ecosystem: Trust the Machine

While Google is adding transparency to its automated systems, Meta is taking a different approach: aggressively pushing advertisers toward a simplified, consolidated campaign structure where the AI is firmly in the driver’s seat.

The End of the Manual Era: The old best practice of hyper-segmenting audiences into different campaigns and ad sets is now actively discouraged by Meta. The platform’s machine learning now rewards advertisers who consolidate their efforts and trust the system.
Advantage+ is the New Default: Advantage+ Audiences are now consistently outperforming manual targeting. The platform rewards advertisers who use broad audiences and let the algorithm find the right buyers based on billions of real-time signals. The very idea of targeting control is becoming an illusion; most inputs provided by advertisers are now treated as “suggestions” to the algorithm rather than strict rules.
When Creative Becomes Targeting: With manual targeting levers being removed, the ad creative itself has become the primary filtering and targeting mechanism. The ad copy, imagery, and video are what stop the scroll, speak to a specific audience, and qualify the viewer. The job of the advertiser is no longer to manually find the audience, but to create ads that the right audience will find on their own.
New Creative Breakdown: To support this creative-centric model, Meta rolled out a new ‘Creative’ breakdown in Ads Manager. This allows advertisers to see performance data for individual ad components like the image, headline, and call-to-action button, providing the granular data needed to optimise what has become their most important lever.

Microsoft’s Cross-Platform Alignment

Microsoft Advertising also made a significant change to its bidding strategies in July, driven by a desire to simplify its offerings and align more closely with Google.

The Retirement of tCPA & tROAS: Microsoft announced that starting in August, it will retire Target CPA (tCPA) and Target ROAS (tROAS) as standalone bidding strategies for all new campaigns.
Consolidation into Maximize Strategies: These bidding options are being merged directly into the Maximize Conversions and Maximize Conversion Value strategies. Advertisers will now select one of these broader strategies and can then set an optional tCPA or tROAS goal. This is not a functional change to the underlying bidding algorithm but rather a simplification and consolidation of the user interface.
Why It Matters: This move brings Microsoft’s bidding structure into direct alignment with Google’s, which made a similar shift in 2021. This makes cross-platform campaign management and, crucially, campaign importation from Google Ads, a much easier and more seamless process for advertisers who operate on both platforms.

The convergence of these trends across all major platforms signals a fundamental role-shift for the PPC practitioner. The job is rapidly moving away from that of a day-to-day “operator” who pulls levers and sets bids, and toward that of a “strategist” or “AI trainer” who is responsible for feeding the machine high-quality inputs and interpreting its complex outputs. Platforms are systematically removing manual controls like granular bidding and audience segmentation. In their place, they are demanding more strategic inputs—such as high-quality creative assets that can act as targeting filters and clean, robust first-party data for the AI to learn from. Simultaneously, they are providing more sophisticated analytical outputs, like the new transparency reports in PMax and AI Max. Consequently, the value of a successful PPC professional in late 2025 comes less from technical tweaking and more from high-level creative strategy, data architecture, and the analytical ability to interpret AI performance and make strategic business decisions.

Key Platform Updates

Beyond the major strategic shifts, July also brought a host of important tactical updates across the major advertising platforms that require direct action or awareness from practitioners.

Google Ads Command Center

Forced Evolutions:
- Video Action Campaigns (VACs) to Demand Gen: The automatic upgrade of all remaining Video Action Campaigns to the newer Demand Gen format was completed in July. This is more than just a name change; it represents a strategic shift. Practitioners must now adapt their creative and targeting strategies to this more visual, discovery-based format that spans YouTube, Discover, and Gmail and requires a mix of both video and image assets to be effective.
- Deprecation of Shared Ads: Google is officially sunsetting shared ads, the reusable creatives that could be deployed across multiple ad groups. As of October 15, 2025, new shared ads cannot be created via the API, and existing ones will stop serving entirely in Q1 2026. This forces a complete move to asset-based formats like Responsive Search Ads and PMax. Advertisers must develop new workflows for creating ads at the ad group level and should export all historical performance data from shared ads now before that linkage is lost forever.
New Integrations & Tools:
- Reddit Cost Data Import: A new native integration now allows for the automatic import of Reddit ad spend and performance data directly into Google Analytics. This greatly simplifies cross-channel performance analysis and reporting for brands advertising on the increasingly popular platform.
- Keyword Planner Enhancements: The Keyword Planner is being updated to include local and device-specific data. This will give marketers more granular insights for campaign planning, forecasting, and budget allocation based on geographic and device-level performance expectations.

Microsoft Advertising Workbench

New Budgeting Flexibility for Audience Ads:
- Lifetime Budgets (LTB): Microsoft officially launched Lifetime Budgets for all Audience Ads customers. This long-requested feature allows advertisers to set a fixed, total spend for a campaign’s entire duration (for up to 365 days). It simplifies budget management for seasonal campaigns or fixed-budget initiatives and includes built-in overspend protection, with any overcharges being automatically refunded.
- Budget Scheduling: Hot on the heels of LTB, Microsoft also introduced Budget Scheduling for Audience Ads. This feature allows advertisers to set different budget caps for specific date ranges within a campaign’s lifetime. This enables planned spending bursts during sales events or promotional periods without the need to create multiple campaigns or reset campaign learning.

Amazon Ads Console

Enhanced Seller & Advertiser Tools:
- Portfolio Budget Sharing: Advertisers can now enable automatic budget reallocation within their portfolios. This feature allows unspent daily budgets from underperforming campaigns to be automatically shifted to better-performing campaigns within the same portfolio, maximising the efficient use of available funds.
- Simplified AMC Queries: Amazon Marketing Cloud (AMC) has been made significantly more accessible. Advertisers can now describe their desired target segments in plain language, and the system will translate these descriptions into the complex SQL queries required to generate the audience, opening up advanced audience insights to a much wider range of users.
- ASIN-Level Performance Dashboard: A new dashboard provides granular, ASIN-level data, including demographic reports and market basket analysis. This offers advertisers deeper insights for optimising ad targeting and product strategy.

Social & Emerging Channels

Ads on Threads: Meta has officially opened up advertising placements on its microblogging platform, Threads. This provides advertisers with new inventory for image, link, and sponsored text post formats on the rapidly growing social network.
Reddit “Recommendations”: To help advertisers succeed on its platform, Reddit launched a new “Recommendations” feature within its Ads Manager. The tool is designed to help both new and experienced advertisers quickly optimise their campaigns by providing simple, actionable suggestions for improvement.

The Bottom Line

The strategic shifts of July are grounded in hard economic data and performance benchmarks that define the current PPC environment. Advertisers are facing a dual challenge: the cost to reach customers is rising dramatically, while the value of a traditional click is being questioned.

The Rising Tide of Ad Costs: A Cross-Platform Phenomenon

Data from the first half of 2025 reveals an alarming trend of cost inflation across all major advertising platforms. Advertisers are paying significantly more to reach their audiences, making budget efficiency and the elimination of waste more critical than ever.

Google Search: Average CPCs are up 45% year-over-year.
Meta: Average CPMs are up 106% year-over-year, and CPCs are up 64% year-over-year.
LinkedIn: The B2B platform has seen the most dramatic increases, with CPMs up a staggering 209% year-over-year and CPCs up 147% year-over-year.

This level of inflation means that advertisers must be ruthless in their optimisation efforts. Budgets must be focused on what works, and settings that can lead to wasted spend—such as unchecked Google Search Partners or broad Meta/LinkedIn Audience Network expansions—must be scrutinised and managed carefully.

Q2 2025 Performance Deep Dive: Benchmarking Your Success

To provide context for this challenging environment, an analysis of Q2 2025 performance benchmarks reveals how different sectors are faring and where opportunities may lie.

Table 1: Q2 2025 Google Ads Benchmarks by Industry (2024 vs. 2025)

Industry	Metric	2024	2025	YoY Change
Attorneys & Legal	CPC	$8.95	$8.58	-4.1%
	CVR	4.8%	5.09%	+6.0%
Construction & Home Improvement	CPC	$7.60	$7.85	+3.3%
	CVR	7.1%	7.33%	+3.2%
Retail & Shopping	CPC	$2.61	$3.49	+33.7%
	CVR	4.1%	3.83%	-6.6%
Restaurants & Food	CPC	$2.18	$2.05	-6.0%
	CVR	8.72%	7.09%	-18.7%
Health & Fitness	CPC	$4.78	$5.00	+4.6%
	CVR	6.54%	6.80%	+4.0%
Education & Instruction	CPC	$4.39	$6.23	+41.9%
	CVR	7.91%	11.38%	+43.9%
Finance & Insurance	CPC	$3.68	$3.46	-6.0%
	CVR	2.91%	2.55%	-12.4%

Source: Data compiled from TheeDigital’s 2025 Google Ads benchmark report.

This data provides critical context. For example, a retail advertiser seeing rising CPCs and declining conversion rates is experiencing a broader industry trend, not necessarily a failure of their specific strategy. Conversely, the Education sector saw a massive spike in CPCs but also a huge gain in conversion rates, suggesting that while competition is fierce, highly qualified traffic is converting at a much higher rate.

Table 2: Q2 2025 Retail Media Performance Snapshot

Metric	YoY Change	Key Observation
Retail Media Spend	+18%	The channel continues to show recession-proof growth, attracting significant budget.
Clicks	+16%	Growth in engagement is keeping pace with spend growth.
Click-Through Rate (CTR)	+9%	The channel is becoming more efficient at driving engagement.
Cost-Per-Click (CPC)	+2%	Costs are remaining remarkably stable despite the massive influx of spend.
Amazon DSP Spend	>20% of Total	Amazon’s programmatic offering is maturing, now a major part of the mix.

Source: Data compiled from Skai’s Q2 2025 Digital Advertising Trends Report.

This data provides the quantitative evidence behind the strategic shift toward RMNs. While costs are rising on traditional search and social platforms, retail media is demonstrating a unique combination of strong growth and maturing efficiency, making it a compelling area for budget reallocation.

Strategic Synthesis: The “Great Decoupling” and the First-Party Data Imperative

The convergence of these two major trends—soaring ad costs and the “Great Decoupling” of search visibility from website traffic caused by AI Overviews —is creating a perfect storm for advertisers. Paying significantly more for clicks that are simultaneously becoming scarcer is not a sustainable long-term strategy. This reality forces a strategic pivot. Brands must urgently prepare for a more privacy-compliant, cookie-less future by investing heavily in consent management and, most importantly, building robust first-party data collection and usage strategies. Tools like the new Google Tag Gateway are no longer optional nice-to-haves; they are critical infrastructure for survival in the new advertising landscape.

The Compliance Corner

Finally, July brought several critical policy updates that could lead to ad disapprovals or even account suspensions if ignored.

Google’s Dangerous Products Policy Update

Effective September 1, 2025, Google will fully enforce its updated Dangerous Products policy, which now includes a ban on all ads for pill presses, capsule-filling machines, and related components or manuals.
Action Required: Advertisers in the health, wellness, and supplements industries must conduct an immediate and thorough audit of their product feeds, ad copy, and landing page content to ensure full compliance. This is part of a broader trend, with similar restrictions expected for other sensitive product areas in the near future.

New Certification for Drug-Related Ad Targeting

Advertisers in the U.S., Canada, or New Zealand who target drug-related terms (for both prescription and over-the-counter products) must now be certified by Google to use personalised or interest-based targeting methods. This includes Customer Match, similar audiences, and affinity-based signals.
Action Required: Uncertified healthcare and pharmaceutical brands risk a significant loss of campaign reach and must secure this certification immediately. Google has indicated it plans to streamline this process with in-platform certification and auto-reminders for all high-risk ad categories in the future.

The Overarching Privacy Mandate

The constant drumbeat of privacy and regulation continues to grow louder. The future will involve a different cookie ecosystem and far more transparent data practices.

Action Required: The message for all advertisers remains consistent and urgent: invest in a proper consent management platform, button up your first-party data collection and usage protocols, and actively work to reduce your reliance on third-party data. Failure to make these investments will inevitably lead to measurement blind spots, degraded campaign performance, and potential regulatory penalties.

Conclusion: Your Action Plan for August

July was a month of strategic reckoning. The ground has shifted beneath the feet of every PPC practitioner, and standing still is no longer an option. To adapt and thrive in this new landscape, every advertiser should prioritize the following actions in August:

Re-evaluate Your Google Shopping vs. Amazon Ads Budget Split. The competitive landscape has been fundamentally redrawn. Analyze your performance data since late July and reallocate your budget to seize the new opportunities that have emerged.
Embrace Your New Role as an AI Strategist. Shift your focus from manual, tactical tweaking to feeding the platform AIs high-quality strategic inputs. Your most important levers are now creative excellence, first-party data integrity, and providing clear business signals and objectives.
Conduct a “Waste Elimination” Audit. With costs rising, you must be ruthless in cutting what isn’t working. Scrutinize Search Partner performance, disable audience network expansions where they are not providing value, and leverage the new negative keyword capabilities in PMax to improve traffic quality.
Manage Platform-Forced Migrations. Do not let the platforms make decisions for you. Proactively review and adjust your former Video Action Campaigns (which are now Demand Gen) and develop a clear transition plan for the sunsetting of Shared Ads to preserve historical data and ensure a smooth workflow change.
Test New Budgeting Tools. If you run Microsoft Audience Ads, begin testing the new Lifetime Budget and Budget Scheduling features to gain more sophisticated, long-term control over your campaign pacing and spend.
Perform a Policy Compliance Check. Immediately review your ad accounts for compliance with Google’s new Dangerous Products and Drug-Related Targeting policies to avoid costly ad disapprovals or account disruptions.