The retail peak season is in full swing, but thanks to AI and rising CPCs, the rules have changed. Jérémy Courty, Head of Paid Search at Genie Goals, shares his insight on how to navigate the shift.

For many of us whose clients are primarily in retail, the peak season is a highly anticipated period. However, the Paid Search landscape has undergone significant transformations in recent months. It’s no surprise that 2025 has been dominated by discussions among clients and teams regarding increasing CPCs on Google and the rise of AI. Heading into peak, we can sense some nervousness so let’s delve into these key areas.

Why are CPCs rising?

Regardless of your industry, you’ve likely experienced the impact of rising CPCs, leading clients to question their agency’s effectiveness. Numerous factors contribute to year-over-year CPC increases, including the adoption of new AI-led features like Performance Max and AI Max or heightened competition within ad auctions.

The fundamental reality is that acquiring the same click now costs more than it did last year, a phenomenon that has affected nearly every industry in the UK. Access to Google’s internal tools for measuring demand and cost within specific verticals confirms this as a widespread trend. It is clear that the “natural Google year-over-year increase” is becoming unsustainable for many.

What is AI in Paid Search?  

There has been considerable discussion recently surrounding large language models (LLMs) such as ChatGPT and Gemini, leading to a rapid adoption of AI-led campaigns this year. While embracing these tools and campaign types can significantly enhance team productivity and creative opportunities, it’s important to recognise that AI and machine learning are not new to Paid Search. Smart bidding strategies, for instance, have been integral to PPC for years, a stark contrast to the manual bidding days based on location, device, or time of the day.

More recently, Google has introduced advanced tools like Performance Max and AI Max for search, which utilise keyword-less targeting and leverage Google AI to optimise ads. This really demonstrates a swift evolution of AI capabilities, rather than an entirely new concept within PPC, a distinction which I think is often overlooked.

But the Google landscape has evolved. Beyond new product adoptions, Google has launched AI Overviews and, more recently, AI Mode in the UK, enabling consumers to obtain curated answers without leaving the platform. So where does that leave us? At the moment, ads are only available above or below AI overviews in the UK and they are being piloted in the US within AI Mode. But we all know it’s coming and that is the major change which raises critical questions for us: Will reporting on these new placements be possible? What level of control will be provided? How can we ensure visibility?

So let’s face it – rising CPCs and the constant and rapid change of Google AI products can feel overwhelming, and equally no one wants to be left behind.

So what can we do as PPC managers during this peak season?

While I understand the enthusiasm behind new feature releases, it is crucial to exercise sound judgment here. Not all features need to be tested and not all will be relevant to all brands. And given our proximity to November, this may not be the most opportune time for immediate implementation.

For instance:

• If you are exclusively on standard shopping, considering an experiment with Performance Max may be beneficial.
• Similarly, for AI Max for search, a 50/50 traffic split represents the most effective approach prior to full adoption. However, the decision to implement this should be carefully evaluated, particularly if broad terms have not yet been integrated into your generic search campaigns.

One thing for sure, not testing those new ad types could result in a competitive disadvantage once ads become available on LLMs such as AI Mode or AI Overviews. These campaign types are intrinsically linked to the evolving Google ecosystem so my one key takeaway for success during peak is a year-round test-and-learn approach that leads up to Q4.

My point here is about striking the right balance between business objectives and the changes we’re seeing within the Google ecosystem, and understanding how one influences the other. Your role is to really cut through the noise and implement what will make strategic sense for your brand.

An example of that is your budget pacing throughout November – competition will be fierce and one thing we have learned this year is that CPCs won’t be coming down, with smaller advertisers facing the risk of being priced out of the auction. While Black Friday week is the busiest in terms of volume, there is a big argument to bring your budget forward while demand is high and CPCs are more reasonable. Shift the perception of Black Friday week to Black Friday month and in many cases, same or more volume will be achieved, at a better return on ad spend.

A PPC Manager’s Action Plan

Beyond all of these moving parts, there are 3 fundamentals that need to be emphasised and that we – PPC managers – have control over:

1. Measurement: In our current privacy-centric environment, which, while beneficial for consumers, presents challenges for advertisers. Factors such as cookie consent banners, ad blockers, and the impending phase-out of third-party cookies in Chrome mean that a significant portion of traffic driven via Paid Search channels is either lost or misattributed, often to Direct. Consequently, server-side tracking is crucial to ensure that machine learning models are fed with the most relevant data, forming the bedrock of every AI-led campaign.
   
   
2. Feed enhancement: simply put, your feed is the equivalent of your creative strategy on Paid Social. It is the driving force behind your shopping campaigns. Much like robust measurement, an optimised feed will help in identifying the right customers and mitigating the impact of rising CPCs.
   
   
3. Google Ads account structure: with all these changes in mind, the question that we need to ask ourselves is ‘are we set up in a way that still makes sense for the business’. While it may have been back in Q1 of this year, the ecosystem has changed so we need to constantly re-evaluate our structure, more than we ever did before.

Final Thoughts

My final thought is that while AI undoubtedly enhances productivity and allows our teams to focus more on strategic tasks, it hasn’t taken away the fundamentals of running Paid Search activity over Peak. This includes daily budget pacing, agile bid strategies adjustments, and a keen focus on actual results. Google’s platform is not a ‘set it and forget it’ solution; it still demands critical thinking and proactive management.

And with that, happy peak season! 

Author Bio: Jérémy Courty is Head of Paid Search at Genie Goals. He has spent over a decade driving growth for iconic e-commerce brands including Calvin Klein, Amara Living, and Mamas & Papas. He specialises in building holistic performance strategies across Paid Search with a strong focus on international expansion. And as a big picture performance marketing agency – also offering Paid Social and Affiliate marketing – his goal is to ensure that their clients money is spent wherever it’ll achieve their overall business objectives.

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