CPC Inflation Starts Before the Auction—Here's Where Paid Search Economics Have Shifted

Per Search Engine Land, CPC inflation stems primarily from three layers operating upstream and downstream of the auction itself: brand visibility (where AI Overviews absorb organic clicks), reach via auction mechanics, and post-click experience. The analysis notes that cross-industry average CPCs have more than doubled over a decade, with some accounts seeing 25% year-over-year inflation, while organic click volume has declined 8% as AI summaries capture user intent that previously drove paid search efficiency. Ben Wood contends that paid teams focusing solely on bid optimization and ad copy miss the real opportunity—instead, brands should invest in upstream visibility across platforms, test emerging channels with lower competition (like Microsoft Advertising and Reddit), and treat landing-page experience as a core defense against acquisition-cost inflation.