Optmyzr just released its Q1 2026 Google Ads benchmark report, covering 21,000 accounts globally. The headline numbers tell a story that will be familiar to anyone managing paid search budgets: more clicks, same conversions.
Click-through rates are up across most campaign types. Google's AI-driven ad formats are getting better at generating engagement. But conversion rates remain stubbornly flat. The gap between clicks and outcomes is widening, which means the cost of an actual customer acquisition is rising even as surface metrics improve.
The campaign type shifts are striking. Demand Gen campaigns saw spend increase by 53.2% quarter over quarter. Video campaigns dropped 31.6%. Performance Max continues to dominate Shopping-intent budgets. The mid-market segment (accounts spending $10K to $100K per month) is outperforming both smaller and larger accounts on efficiency metrics.
Quarter-over-quarter increase in Demand Gen campaign spend across Optmyzr's 21,000-account dataset
The CTR-conversion divergence is the number worth paying attention to. When click rates climb but conversion rates do not follow, it typically means one of three things: ad targeting is broadening to less qualified audiences, landing page experiences are not keeping pace with ad quality, or the additional clicks are coming from placements with lower purchase intent.
Google's push toward automated campaign types amplifies all three. Performance Max and Demand Gen campaigns optimise aggressively for engagement signals. They are very good at finding people who will click. Whether those people convert depends on factors the algorithm does not fully control.
The mid-market outperformance is worth noting for Australian businesses. Accounts in the $10K to $100K monthly spend range are seeing better CPA and ROAS than both smaller accounts (which lack data volume for effective automation) and larger accounts (which often have more complex attribution and longer sales cycles). This is the sweet spot where Google's automation has enough signal to work effectively without the noise that comes at enterprise scale.
The Video campaign decline is also significant. A 31.6% drop in spend suggests advertisers are reallocating away from awareness-focused video toward performance formats. Whether that is a smart long-term move depends on the business. For brands with strong conversion infrastructure, the shift makes sense. For those still building awareness, cutting video spend could hollow out the top of the funnel.
Why it matters
The Google Ads platform is optimising itself toward engagement, not outcomes. If your reporting focuses on CTR and impression share, the numbers will look good. If your reporting focuses on cost per acquisition and return on ad spend, the picture is less flattering. The divergence between these two views is growing, and it favours Google's bottom line over yours.
What to do about it
Review your Q1 numbers against these benchmarks. If your CTR is up but conversions are flat, you are on trend but that is not a compliment. Audit your landing pages against your best-performing ad copy. Test whether your Demand Gen campaigns are driving incremental conversions or cannibalising Search. If you are in the mid-market spend range, lean into automation but keep manual campaign controls as a benchmark. If you are cutting Video spend, make sure you have another awareness channel filling the gap.
The platform is getting better at spending your money. Make sure it is getting better at earning it back.
