By Purva Gupta, Co-Founder and CEO of Lily AI
Key Takeaways
- Google CPCs are down while Shopping Ad clicks rose 18% YoY
- Meta CPMs are flat, overall ad spend is up, yet retail ad spend on shopping ads is flat
- Organic retail traffic is diversifying as AI-driven traffic is growing, even if Google AIOs are flat
Q2 2025 retail data across digital advertising and organic search was marked by both ups and downs. Many brands, retailers, and agencies are left wondering: which is noise, and where is the signal?
At Lily AI, we believe in measurable performance that creates impact. To find the signal, we synthesized the Q2 digital landscape from advertising to organic and AI-powered search from sources like Tinuiti, BrightEdge, and Adobe, and focused on the largest advertising platforms for e-commerce and shopping, Google and Meta, as well as organic search across both Google (SEO and AIO) and AI-powered search and answer engines (GEO and AEO).
The result? Three golden opportunities for marketers and advertisers right now.
1. Google Shopping is Delivering More for Less
Retailers are getting more value from search these days. Google Shopping Ad clicks grew 18% year over year in Q2, while average CPCs rose just 1%, a significant drop from 11% growth in Q1.
That efficiency was partly driven by reduced competition. Temu, Shein, and Amazon pulled back their Shopping investments, opening up lower-cost traffic without any drop in demand.
To compare, the trends weren’t only seen on Google. Amazon’s Sponsored Products click volume also surged 19% YoY—the best performance for the format since Q4 2022. Amazon, like Google, as a media business saw impressive clicks and consumer demand, yet Amazon, the advertiser, scaled back on Google ad spend.
Tinuiti: Q2 2025 Benchmark Report
The Retail Opportunity in Google Shopping
Double down on Google Shopping ads while CPCs are still suppressed yet consumer demand is strong. Don’t rely on media investments alone; investing in Product Content Optimization will further make those dollars work harder by enriching Google Merchant Center and product feeds with hyper-granular, accurate, and conversion-driving product attributes and details.
2. Meta Delivers Cost-Effective Reach
Meta delivered reach without added extra cost. Overall ad spend on Meta properties rose 12% YoY in Q2. Impressions grew 13%, yet critically, CPMs held flat compared to the same quarter last year.
Advantage+ Shopping Campaigns (ASC) remained a key component, accounting for a consistent yet fairly flat 35% of retail and eCommerce ad spend on Meta. That’s down slightly from 38% in Q1, but up significantly from 23% YoY, marking four consecutive quarters of ASC holding one-third or more of retail share.
Tinuiti: Q2 2025 Benchmark Report
The Retail Opportunity in Meta
Maintain investment in Meta Advantage+ Shopping campaigns while CPMs remain flat and impression growth is strong. Improve ad performance and product relevance with Product Content Optimization.
3. Retail-Specific AI-Driven Traffic Is Growing
AI-powered search and answer engines, such as ChatGPT, Perplexity, and Claude, are emerging as significant traffic drivers. Adobe reports a 1,200% increase in visits to U.S. retail websites from GenAI tools year-over-year.
Adobe Analytics, July 2024 – Feb 2025
Yet on Google, it’s a different story for retailers. Unlike other industries, such as education and healthcare, which saw growth rates as high as 87% in Google AI Overviews, eCommerce lagged at 4% growth, according to BrightEdge. Why? Of course, only Google knows for sure; yet, when you have a thriving Google Shopping Ads business, you tend to minimize disruption.
BrightEdge Report – AIO Overviews One Year Review Research Paper and Deep Dive
The Retail Opportunity in SEO, AIO, AEO, and GEO
Keep a close watch on how Google AIO evolves within eCommerce, and monitor your own category’s brand presence in AI environments. To capture a larger share of brand mentions and product citations, it’s critical to start investing in Product Content Optimization in order to ensure highly granular, structured, and “machine-friendly” product data that can be easily crawled, indexed, understood, ranked, and cited across both traditional search engines and AI-driven search and answer engines.
In Summary
Q2 data shows that performance gains in paid and organic channels are a real opportunity for retailers. Capitalizing on and maximizing these opportunities can all be achieved with Product Content Optimization. In the era of AI Discovery, structured data, product attributes, and consumer-friendly natural language details boost product discovery and sales across critical digital channels.